How To Sell a Vehicle You Haven’t Paid Off Yet


Although the ideal to sell a vehicle is to be clear and paid, it’s not impossible to sell a vehicle you haven’t paid off. With a little preparation and know-how, you can easily sell a used car for cash with little to no hassle and reap the benefits of a payout.

How Can You Sell a Vehicle You Haven’t Paid Off Yet?

When you are trying to sell a used Jeep, SUV or truck that still has an active loan, the lender technically owns your vehicle. In fact, the lender typically holds the title until you’ve made the last car payment and then signs off on the title so that it is yours free and clear. But, how do you sell your used car when you don’t have a clear and free title?

First, though, you must understand the type of equity you have in your vehicle. Most buyers either owe more than the vehicle is worth or owe less than what is owed on the current vehicle loan.

How should you proceed to sell a used car? Here are some options.

Selling a Used Car to a Private Party

If you plan to sell a used car on your own, you’ll need to negotiate through the lender. For instance, if you still owe $6,000, but you sell a used truck, car or SUV for $3,000, the private party buyer will need to pay the total sale amount to the lender and then you will need to pay the remaining $3,000 to the lender. This is dubbed a negative equity sale. Basically, you lose money when selling a used SUV, Jeep or minivan in this manner.

But, what happens when you sell a used car with positive equity? You can do several things. First, you can simply pay off the vehicle before selling a used truck or Jeep or you can have the private party pay the lender the total sale and the lender will forward a check for the remaining balance to you and issue the title to the buyer.

Selling a Used Car to a Car Dealership

The equity you have within the vehicle is also important to consider when selling or trading in a used car to a dealership. If you have positive equity, you can upgrade to another vehicle of your choice and trade in the vehicle with the positive equity as a down payment. However, if you have negative equity and want to trade or sell a used car to a dealership when you still have a car loan, you have a few less-than-ideal options.

One, you could wrap what you owe into a new car loan and trade-in your used car for sale. Second, you could pay off the used car for sale before trading in your vehicle at a car dealership. It’s important to consider whether or not the car dealership is offering special financing rates or cash back that can cover what you owe on the vehicle. If not, though, you may pay more for your new car over the length of the loan since your negative equity is wrapped into the new loan.

What Documents Should You Have Available When Trading in a Financed Car for Sale?

If you decide to trade in your used car for sale that you haven’t paid off yet, you’ll need to bring documentation to the car dealership, such as the loan information, including payoff and account number, as well as the keys and remotes for your used car for sale that you haven’t paid off yet. Most dealerships will also need your proof of insurance, vehicle registration and driver’s license to process a new car loan.

Be prepared with information to justify the trade-in value of your used car for sale, too. For example, perform some research prior to arriving to the dealership on sites such as Edmunds or Kelley Blue Book.

Be realistic about the value of your vehicle and be prepared to showcase why you should be able to get a trade in value that pays off your existing car loan or minimizes your negative equity.

Don’t Trade It In

One of the best alternatives to trading in a used car or trading in a financed vehicle is to NOT trade it in at a car dealership. Instead, consider the benefits of working with Don’t Trade It In. We are a nationwide, premier car-buying firm who prides itself on providing consumers with fair values for their used cars for sale. And, we can provide you with cash upfront to pay off your existing car loan.

Whether you have a used truck for sale, a used Jeep for sale or a used minivan for sale, simply log onto our website, upload photos and vehicle information on our online form and our team will promptly get back to you with a fair-value offer for your used car for sale. We get it. It’s tempting to trade in a car at a local dealership, but in the long run, you’re probably going to lose more of your hard-earned cash. Let Don’t Trade It In indulge you with a fair value for your used car for sale that allows you to upgrade to a premium model, pay off some bills or take that vacation you’ve dreamed of taking.

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