How do I sell my car if the lender owns the title?

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Many car owners sell their vehicles privately, either to dealerships or to other drivers.

Likewise, many car owners finance their cars through banks or credit unions. This begs the question: if you don’t own the title, how can you sell a car?

Tips for selling a car if the bank owns the title

Check out these tips for car owners looking to sell a vehicle if the bank holds the title and have peace of mind during the selling process.

Determine the gain

The first step is to find out what you still owe on the car. You can do this by calling the bank that holds the loan and simply asking them what your repayment amount would be.

While you’re on the phone, be sure to ask them if they have any important procedures for a vehicle owner selling their financed car to a third party.

Use buyer’s money

Here’s the tricky part: Once you’ve figured out the refund amount and sold the car, you’ll need to use the buyer’s money to foot the bill. Of course, you can also use your own money. For many sellers, however, reimbursing the car will not be possible without the buyer’s money.

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The result is that some buyers will not be comfortable with this type of transaction. To allay a potential buyer’s concerns, ask the buyer to meet with you at the bank where your car is financed and have an employee explain the situation to you. If the buyer remains uncomfortable, you may need to use your own money to pay off the loan or find another buyer.

The good news is that many banks accept payments directly from the buyer. We suggest asking the buyer to write two checks: one to your bank for the refund amount and one to you for the remainder of your transaction amount.

Transfer title

Once the buyer pays for the car and you pay off the loan, the title is clear and clear.

Most banks give you two options: you can take the security or you can tell the bank where to send the security. If the buyer is financing the car, your bank will need to send the title to the buyer’s bank. Otherwise, the title can go directly to the buyer.

Read: 5 tips for young drivers to help lower their auto insurance

Difficult, but not impossible

Those looking to sell a car while the bank holds the title will have to do a little more legwork, but it’s not impossible. Just be sure to do all you can to allay the buyer’s concerns.

Following: 7 easy ways to reduce the cost of owning a car

After all, the buyer is spending a large amount of money – and he is acting on your word that you send him with the title.

This story originally took place on Autotrader.com.

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