Can I Sell a Car with an Outstanding Loan?
2 Answers
You cannot sell a car with an outstanding loan. If the car loan is still being repaid, the vehicle's title is held as collateral by the lending bank, and the individual has no right to dispose of the car. Ownership of the vehicle belongs to the lending bank, and the individual only has the right to use the car. Only after the loan is fully repaid and the individual completes the lien release process will ownership of the car revert to the individual. With full ownership, the car can then be freely bought and sold in the market. To sell the car, the remaining loan must be paid off in full. You can negotiate with the buyer to pay a portion of the car's price upfront to settle the remaining loan, complete the car transaction, and then have the buyer pay the remaining balance.
A car with an outstanding loan can actually be sold. I'm just an ordinary car owner, and I did this last year. At the time, I was under financial pressure and wanted to switch cars, but there was still a significant amount left on the loan. I found a buyer to negotiate the price and first contacted the bank to explain the situation. They guided me through the process: part of the sale proceeds would go directly to the bank to settle the remaining balance, and the rest would go to me. There was a lot of paperwork involved to ensure a smooth transfer of ownership. However, you need to be careful—if the market price of the car is lower than the remaining loan balance, you might end up having to pay the difference after the sale, leading to even greater losses. So, it's best to check the remaining loan amount and the market price beforehand to avoid surprises. I used a car dealership agent recommended by a friend, which cost a bit in service fees but made the process much easier. The whole thing took about two weeks to complete, and I managed to sell it safely. Remember not to arrange private deals, as they can easily lead to disputes.
