I bought a car earlier this year, and I have been making payments on it regularly for about 7 months. However, I want to sell the car to a private party and buy a cheaper car paying cash in full. The car I bought is on loan and now the dealer is offering me very less compared to the blue book value. I am expecting $16k from the car and my loan outstanding on it is $13.5k. I want to pay off the $13.5k and put the $2.5k along with some money I saved up for a cheaper car, so that I have no payments. How do I go about this?

Any help would be appreciated.

  • What do you mean by "the car is on loan"? Did you lease it, or buy it? If you bought it, there is no obligation to sell it to the dealer; go find another buyer. If it's leased, it isn't yours to sell.
    – keshlam
    Oct 7, 2014 at 1:19
  • I bought it. But I do not have the original title in my hand. That is why I am asking the procedure.
    – user19894
    Oct 7, 2014 at 1:35
  • Yes, I have the duplicate title. But, what am I exactly supposed to do? Give the buyer the duplicate title? and ask him to pay me the difference and make the remaining payments on the car? Or how does it work?
    – user19894
    Oct 7, 2014 at 1:57
  • 2
    (Reminder: What the blue book says it's worth, and what you can get for any particular car at any particular time, are not necessarily the same thing. The car's condition matters a lot, as does finding the right buyer. Don't expect this to be fast; you may be lucky, or finding someone who will pay what you want for it may take months, or you may have to settle for less. In the end, what it's worth is what someone is willing to pay for it.)
    – keshlam
    Oct 7, 2014 at 2:07
  • 4
    I guess the point is there is a chicken-and-egg problem: the buyer doesn't want to hand over the money until you can hand her a clear title without a lien, but the lender won't release the lien until you give them the money. There must be some way out of this loop, but I don't know what it is, and none of the answers/comments so far have addressed it. Oct 7, 2014 at 13:36

2 Answers 2


You need to contact the lender. Your copy of the title should show that your lender has a lien on the car.

The potential buyer will want to be able to walk away with good title without risking their money.

It will not be as simple as signing the back of the title. The lender doesn't drop their lien until they get their money.

When trying to sell a car with a lien to a private buyer, you may have to both go to the lender to complete the transaction. Or the buyer might want to send the money directly to the lender, or may insist on an escrow service.

The fact you don't own the car may scare most individuals from the process. You will have to do whatever makes them comfortable.

A dealer will not be concerned about this type of transaction, but the fact that most individuals are, may give the dealer enough competitive advantage to lower their offer to you.


  • determine exactly how much you owe.
  • Price an escrow service.
  • run adds, but mention that the car has a lien.
  • Negotiate

Keep in mind that after only 7 months many car loans are upside down.

  • Gotta admit, when I've done this I owned the car free and clear, so this may well be correct. It does make sense.
    – keshlam
    Oct 7, 2014 at 11:52
  • @mhoran. Can you please tell me the process in steps? For example: - 1.) Find A buyer. 2.) Agree to the price 3.) .....
    – user19894
    Oct 7, 2014 at 13:15
  • 1) Contact lender and inform them that you will be selling the car. They can tell you what they will require in paperwork.
    – keshlam
    Oct 7, 2014 at 14:02

Just tell the buyer that there is a lien and explain the situation. Give them the car with a bill of sale after they buy the car from you. They can get a temporary tag at least in the State of Florida during this period of time. Take the buyer's money and deposit the check. Pay off your loan. Ask your bank to expedite the electronic title by paying a fee. I did this in March 2012 with no hassle at all. I was the seller. Some buyers may balk at this idea so just keep this in mind.

  • 1
    Yes, this is done all of the time. Give the buyer the car, keys and a bill of sale. Even if pay cash and buy a car from a dealer you'll get the title in the mail later. Oct 7, 2014 at 18:13
  • @AbraCadaver: That's correct. I think because people are not used to the process they are a little cautious. Oct 7, 2014 at 18:40
  • 2
    I guess the buyer's concern is that you could pocket the money and move to Argentina. The lender would repossess the car from the buyer, leaving him in the lurch. So it does require that the buyer be willing to trust you at least somewhat. Oct 7, 2014 at 19:01
  • 3
    @NateEldredge: If the lender is local, the lien release can be done at the bank with both buyer and seller present. My bank was not local Oct 7, 2014 at 19:04

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