I own a car personally, but it is mortgaged to a bank. I want to sell it to an individual. I haven't the funds to repay the loan until I'm paid for the car. The buyer doesn't want to pay me without a lien release (or guarantee that one is coming). The bank won't release the lien until it gets the funds. What do people do in a case like this? It must be a common case. What should I do?

1 Answer 1


You could have the buyer go to the bank with you so that he can get evidence that the loan will be paid in full and that the lien will be lifted. The bank won't sign over the title (and lift the lien) until the loan is paid back in full.

DMV.org has a pretty good section about this. (Note: not affiliated with the actual DMV)

Selling to a Private Party

Though more effort will be required on your part, selling a car with a lien privately could net you a higher profit. Here are a few things you'll need to consider to make the process easier:

Include the details of the lien in your listing. You'll list an advertisement for your car just as you would any other vehicle, with the addition of the lien information that buyers will need so as to avoid confusion.

Sell in the location of the lienholder, if possible. If the bank or financial institution holding the lien is located in the area you're trying to sell, this will make the transaction much easier. Once you make an agreement with the buyer, you can go directly to the lender to pay off the existing lien. Ownership can then be transferred in person from the financial institution to the buyer.

Consider an escrow service. If the financial institution isn't in your area, an escrow service can help to ensure a secure transaction. An escrow service will assume responsibility for receiving payments from the buyer and will hold the title until the purchase is complete. Advantages of an escrow service include: Payoff services, which will do most of the work with the financing institution for you. Title transfer services, which can help to ensure a safe and legitimate transaction and provide the necessary paperwork once the sale is complete.


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