Selling a car you haven’t paid off yet can feel complicated — but it’s totally doable. Whether you’re upgrading, downsizing, or just offloading debt, you can sell a car with an existing auto loan — it just requires a few extra steps.
Here’s a step-by-step guide to help you sell a financed car, with or without positive equity.
Can You Sell a Car with a Loan Still on It?
✅ Yes — but because your lender holds the title, you’ll need to pay off the loan balance to transfer ownership to the buyer.
There are two possible scenarios:
- You have positive equity (car is worth more than the loan balance)
- You have negative equity (you owe more than the car’s value)
Both situations are manageable — just require different approaches.
Step 1: Get Your Loan Payoff Amount
This process typically involves your U.S. auto lender and will include interest accrued within a 10-day window.
This is the total you’ll need to pay to fully satisfy the loan.
✅ Make sure to get it in writing — you’ll need it for both buyer and dealer negotiations.
Step 2: Determine Your Car’s Value
Use tools like:
- Kelley Blue Book (kbb.com)
- Edmunds
- Carvana or CarMax offers
Compare this against your payoff amount to see if you have:
- Equity → Car is worth more
- Negative equity → You owe more than the car’s value
These tools reflect typical U.S. market values and may vary slightly based on your state or region.
Step 3: Decide Where to Sell
| Option | Pros | Cons |
|---|---|---|
| Private Sale | Higher price | More steps & slower |
| Dealer Trade-In | Convenient | Lower offer |
| Online Retailers (Carvana, Vroom, etc.) | Fast, transparent | Not always highest value |
If your goal is simplicity, online dealers may even handle the loan payoff for you.
Step 4: Handle the Title Transfer
If you’re selling privately:
- The buyer pays the lender directly to clear the loan
- You pay the difference (if negative equity)
- Lender then releases the title to the buyer
If trading in:
- The dealer typically pays off the loan
- Any equity is applied to your next purchase
- Any negative equity is rolled into your new loan (watch out for this)
Step 5: Close the Sale and Notify Your Lender
Once the sale is finalized:
- Ensure the buyer/lender receives title paperwork
- Verify the loan is officially closed
- Cancel insurance once ownership is transferred
- Keep a copy of all sale documentation for your records
Related: Car Loan with Bad Credit
Still working through financing challenges? Learn how to manage auto loans with bad credit and protect your financial future.
Final Thoughts
Selling a car with a loan is more common than you think — and totally manageable with the right information. Know your numbers, coordinate with your lender, and keep all paperwork clear. Whether you’re selling privately or to a dealer, transparency and planning are key.
