Best Practices to Selling a Financed Car

By Khalid Mustaffa

You initially financed the car that you are about to sell. If you are wondering about the steps you need to take in order to legally, and safely turn your car over, then you are reading the perfect article for this sake. Now, if the lean has been released, and you are the sole owner of the car, then reading this article would be additional information that you may not need, rather pass onto friends and family.

In case you still owe money on the car, then you need to start by contacting the lending bank or dealer to discuss the best way to pay off or close out the loan. You also should inquire about the necessary requirements to obtain a lien release, or a statement stating that the remaining obligations on the car if any and if not also stating that it has been paid off.

If you find out that you owe more money than you can pay prior to selling the car, consider mediator service that would facilitate payment to the lien holder during normal escrow. There are such services on the internet easily found using search engines, or visiting my website for an analysis of these services. If you are not able or not comfortable with the above mentioned methods, consider closing the sale deal at the bank, credit union, or the dealership that holds the lien, this way the buyer can payoff the balance, release the lien, and pay you the remaining agreed upon amount. Make sure you contact the lending entity prior to setting up such arrangement, and schedule and time and date.

The last and most complicated situation is when the lien holder is in a different state. In this case you would need to obtain a bill of sale from the local department of motor vehicles, and then obtain a temporary permit for the buyer to drive the car. Once the loan is paid off, the buyer can then transfer the title ownership. For more information about selling your car, check out the car selling checklist

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