Selling a car that you owe money on?

[BrokeMike]

My car payment is horrible. I really regret financing one now.

I'm 2 years into my 7 year loan and the loan is approximately the same amount as the blue book value of the car.

How do you go about getting rid of a car that you owe a significant amount of money on?

[personalfinanceohio]

try to sell the car privately if you can as you will get more money. Then take the money you receive from selling the car and pay off the loan. Hopefully you can get enough money from the sale that you aren't underwater on the loan.

Best of luck!

[BrokeMike]

i thought that you cannot sell a car if it has a lien on it though?

i'm not saying that i'm not going to pay back the loan with the money i sold the car for, but what's to protect a buyer from that?

[disneysteve]

I'm 2 years into my 7 year loan and the loan is approximately the same amount as the blue book value of the car.

I have no experience with the selling process so I can't offer any advice there.

I'm actually surprised that only 2 years into a 7 year loan, you aren't upside down. Have you checked kbb.com?

I agree with selling privately for the best deal. Don't trade in at a dealer.

For your next purchase, the rule of thumb for a car loan is that the monthly payment shouldn't exceed 10% of your take home pay for no more than a 3 year term. Stick to those guidelines and you won't find yourself in this situation again. Then once that car is paid off, keep setting aside the money each month into a car fund so that you can buy the car after that for cash.

[BrokeMike]

I did stick with that rule, but I lost my last job since I bought the car and make a lot less now in a much more expensive city

[disneysteve]

I did stick with that rule

Not if you had a 7 year loan. 3 years is the max recommended.

[greenskeeper]

Call the bank that has the title to your car. Ask about their process for settling the loan on the car.

Most likely you will have to have the cash from the buyer when both of you go to a local branch and hand over the money. Then you both go to the notary with the title and sign it over.

I've never done this but know plenty of people who have.

[YLTL_Dan]

Been there... I was two years into a five year loan with Nissan when I finally snapped. There's nothing that says you can't sell the car, you just have to take a few additional steps.

Luckily, I sold it for right around what I owed; if you owe more on it and don't have the money, you can try to get a small personal loan from a local credit union. I found a good article on Cars.com that walks you through the process to sell when you still owe money.

[maat55]

i thought that you cannot sell a car if it has a lien on it though?

i'm not saying that i'm not going to pay back the loan with the money i sold the car for, but what's to protect a buyer from that?

It is best to have the buyer meet you at the bank holding the note. You can pay them and get the lien release.

If you do not have enough funds to cover the loan, you may need to secure a loan for the difference in advance.

[BrokeMike]

Hmm..there are no Capital One banks within 2,000 miles

[disneysteve]

It is best to have the buyer meet you at the bank holding the note.

Hmm..there are no Capital One banks within 2,000 miles

I was wondering what you do if the bank isn't local. With so much banking happening online today, that's probably pretty common. Does anyone know how you handle that?

I'd suggest calling the lender and asking them how to go about it.

[BrokeMike]

Yeah I'm curious about that as well, mainly because of situations like dealing with student loans. Can you ever meet with a Sallie Mae person to sort things out? Sorry, whole other topic

[maat55]

I was wondering what you do if the bank isn't local. With so much banking happening online today, that's probably pretty common. Does anyone know how you handle that?

I'd suggest calling the lender and asking them how to go about it.

I agree, he should call his lender and ask. There may be different requirements per institution.

[bjl584]

Trading it in is easy enough. The dealer handles all of the details so far as the outstanding loan and the title.

Selling it privately will probably get you more money, but the loan will need to be settled before you transfer the title to the new owner. To do that, you either need to come up with the cash to pay off the car or get a personal loan to pay it off.

[Wonga]

How about selling it fast ?