Sell a Financed Car: People spend a considerable amount of time every day in traveling from one place to another. Children travel to their schools, adults travel to their workplace, the elderly travel to religious destinations, etc. It is very difficult for any person to carry out their regular schedule without traveling to at least one place in the entire world!
There are a number of options which one can choose to travel from one place to another. One can take a walk or take a cycle, use a means of public transport such as the bus/cab. While some people use their personal vehicles for quick and personal traveling! 🙂
Cars are one of the most widely used private vehicles in the world. Owning a car has its own pros and cons. Thus, there can be situations wherein you own a car and find it difficult to maintain or use it to its full capacity. In such situations, the only logical decision is to sell the car to another person who can take care of it and can use it as required.
However, you might face some difficulty in selling your car if it is financed. The process of selling a financed car is more complicated than purchasing a new one due to the money you owe to your lender, which is generally the bank. You need to coordinate with your buyer and the bank simultaneously. This might get a little hectic due to all the paperwork involved in it!
Thus, here we are with a detailed guide which will explain each and every detail that you must know before you set out to sell your financed car. So stay tuned till the end!
You May Also Like:
- How Does Life Insurance Actually Works and Make Money?
- (Top Trusted) Best Credit Card for Bad Credit 2019
- Top Successful Low Investment Business Ideas for Indians 2019
How to sell your Financed Car (2019)
#1 Do the Math:
Since every loan comes with a lock-in period, which means that you cannot end the loan or pre-pay it completely before completing a minimum number of EMIs. Your bank will also levy a pre-closure charge/penalty. To know the exact amount which you need to pay, make a call to your bank and enquire about it.
Then, calculate the present value of your car. You can use the various online website such as ‘https://orangebookvalue.com/used-cars‘ where you need to enter your car’s company, model, year of make, kilometers driven, etc. In the end, you can check the present value of your car and how it varies depending on its condition.
Now, calculate if your loan amount can be paid off by using the present value of your car. If your car’s present value is more than your loan amount, you will be left with some extra bucks after paying off the loan. If not, you will have to pay some extra money from your own pocket to pay off your debt.
#2 Look for a genuine buyer:
Now that you know the present value of your car 🚗, start looking for a genuine buyer. Instead of personally approaching people, you can list your car on websites designed for seeking used cars. Enter all your details and your expected amount. This will drive away all the people who are willing to pay way less than your expected value and attracts only interested buyers.
Once you come in contact with a genuine buyer through your advertisements, you can agree on a final price and meet each other so that the buyer can view your car for assurance.
#3 Payment Options:
Now that the deal has been finalized, all you need to do is make the payment, so that there is no confusion in the future regarding the ownership of the car.
If your buyer decides to pay off your loan by paying the remaining EMI’s of your car, ask your bank about all the procedures which need to be followed to transfer the loan amount to your buyer’s account.
If the buyer decides to pay off the loan at once, ask him/her to directly make the payment to your bank so that there will be no confusion regarding the loan pay off!
However, if your buyer decides to pay more than your loan amount, you can accept the whole amount and pay off the loan from it to keep the surplus amount with yourself. If the deal is closed for an amount less than your loan amount, you have to add the difference and pay it off to your bank.
Once the loan has been taken care of, the car can be transferred to the buyer.
#4 Doing the Documentation:
You need to contact the department of motor vehicles to file the release of liability. This process will transfer the car under your buyer’s name. Doing this is extremely important because, if your car is found to be involved in an accident or any kind of crime, the police will not catch hold of you.
You will have to pay the fees required to transfer your car from your name to your buyers’ name. The amount is different in different states. Thus, you need to call the department in your state and inquire about the fees.
Since all the documentation and payments have been made, you need to cancel your car insurance. Since car insurance is not transferable and you no longer need it to cover any damages to your car, the only choice left behind is to cancel it. Also, you will not have to pay anything to cancel it and you do not have to renew it!
Conclusion: Guide on How to Sell a Financed Car in USA
This is all you need to know before you decide to sell your car which is still under finance. The process is not very difficult. The only additional step is paying off the loan to the lender, which is generally the bank. Do not forget to contact the department of motor vehicles, since you can get in a lot of trouble if your buyer uses your car for some criminal activity.
If we have missed out on any such important step or if you have any queries, then please let us know about it in the comments section below. We will be glad to hear from you!