Hi everyone,

I have a quick question about selling cars. We want to sell my wife's car to a private buyer (not a trade-in). However, we still owe close to $9,000 on it. How does it work if we don't hold title to the car? Can we use the proceeds of the sale to pay off the loan or do we have to pay off the loan and obtain the title before we can sell the car? I know that if this was a trade-in the dealer would just tack the difference between the trade-in number and the amount owed on the car loan onto the new car loan. We don't want to trade this car, however, because we feel we can make more money through a private sale. Any input would be helpful because we have to sell her car before I can buy an RX-8. Thanks.

you have to pay off the lien first. what you'll need to do is to talk with your bank or whomever is buying it. you can probably get them to pay it off directly with a certified check and then they will release the lien and title directly to the new owner.

another option, and I have done this several times, although it's usually for like 3,000 is to have the dealer take you car as a trade, but you don't trade it, they just pay it off for you and tack the negative equity on. then you are free to sell your car and do whatever you want with it. this has some advantages especially if the dealer is ripping you for your trade. if your credit is decent they will not have a problem doing this, however at 9,000 that's a but much.. and remember it'll make your payment much higher.

Who is the car financed with - a local bank or captive finance bank?

If a local bank, find out if they keep their titles locally and if so can you exchange a cashier's check for it.

Then what you can do is have your buyer give you 2 checks - one for the payoff made out to the bank and one made out to you for your profit. Then meet at the bank, pay off the loan, and give the buyer the title.

If you can't do that, you can still do the deal just have to explain to the buyer that the title will not be available for a couple of weeks. You give them a notarized bill or sale and the car when they pay, and send them the title once you get it. This is pretty common practice since so few folks have a clear title car :D

In these days of bogus cashier's checks it might be a good idea to wait before handing over the title anyway. But if you do the deal at the bank and they sign the title releasing the lien and accept the buyer's check it is pretty much out of your hands anyway.

Dennis

Thanks to all who responded. We sold my wife's car this morning.