How to Sell a Car when the Bank Still Owns Title

How to Sell a Car when the Bank Still Owns Title

When you are still making payments to the bank on a vehicle, the car's ownership technically lies with the bank. But there are ways to get around this if you need to sell a car. It may take some time, but here are a few things you can look at.

Consider Trading it in

If you are wanting to sell the car so you can purchase a different vehicle, trading in the car may be your best option. During the trade in process the dealership will be aware that the car is still being financed. If the car is in great condition, and they feel they can sell it easily, they will pay the car off and get the title from the bank. This will eliminate you needing to work with the bank, aside from getting the payoff value and signing some basic paperwork.

Finance Take-Over

Another option for selling a car while you still owe money is to have someone take over the financing terms. With this option the bank will transfer the loan to a third party. To take advantage of this you need to find a party who will qualify for the finance terms through the existing bank. The downside to this is that you won't make any money on the sale. It's a good option if you are struggling and facing repossession.
Selling it Outright

If you aren't in a dire situation and can spend a few weeks doing legwork, you can sell the car. If you are able to find someone to pay cash for the sale amount, you can have them make the pay off value directly to the finance company, and the rest of the sale value can be paid directly to you. Once the bank has received the pay off value, you can request a clean title be issued. This process can take a few weeks, so both you and the buyer will need to be patient. If the bank is local, this can speed up the process since the paperwork can be filed at a local branch. Once the clean title has been issued, you will need to sign it over to the vehicle buyer.

If the potential buyer is going to finance the car through their bank or another finance company, then you have to have both banks involved. The buyer's bank will issue the payoff directly to the current finance company. Your finance company will then turn the title over to the new finance company. Once that's done, it's out of your hands and you no longer need to worry about it.

Selling a car that is bank owned isn't terribly difficult. People do this every day. It does involve some paperwork and some extra time, but if you are ready to get rid of the car it's worth the extra work involved.