Yes, you can sell a car with a registration loan, but you cannot transfer the title to a new owner until the loan is paid off in full. The registration loan is a type of title loan, meaning the lender holds a lien on your vehicle's title as collateral. Selling the car requires you to settle this debt first to obtain a clear, lien-free title.
The process involves several key steps. First, you need to contact your lender to get the 10-day payoff amount, which is the exact sum required to pay off the loan, including any interest accrued within the next ten days. This is crucial for accurate financial planning. Once you have this figure, you have two primary options for the sale. The most straightforward method is to use the proceeds from the sale to pay off the loan directly. This often requires coordinating with the buyer, who may be hesitant to hand over money without immediately receiving the title. Alternatively, if you have the cash available, you can pay off the loan yourself before listing the car for sale. This simplifies the transaction significantly, as you can present a clean title to potential buyers, making the car much more attractive and easier to sell.
Attempting to sell the car without addressing the lien is not a viable option. The buyer will be unable to register the vehicle in their name without a title free of liens, and you could face legal action for selling property you don't fully own. The table below outlines key considerations and state-specific variations in the lien release process.
| Consideration | Description | State Variation Example |
|---|
| Lien Holder Location | The lender may be out-of-state, which can delay receiving the released title. | In Florida, electronic lien systems can speed up the process. |
| 10-Day Payoff Quote | Essential for knowing the exact amount due; includes all interest up to the payoff date. | Lenders are required by federal law to provide this upon request. |
| Lien Release Document | After payoff, the lender provides a document (e.g., Lien Release, Satisfaction of Loan). | In California, a "Lien Satisfied" form (REG 166) is often used. |
| Title Transfer Time | The time it takes for the DMV to issue a new title after lien release can vary. | Texas may take 2-3 weeks for a new title to be mailed. |
| Buyer's Risk | A buyer assumes risk if they pay before the lien is cleared and the title is transferred. | Some states have escrow services to protect both parties in private sales. |
The entire process requires clear communication with both your lender and the potential buyer to ensure a smooth and legal transaction.
