Selling a car with an outstanding title loan can be a bit complicated, as the title is essentially held as collateral by the lender until the loan is paid off. Here's what typically happens in such a scenario:
Payoff Amount: Before selling the car, you need to determine the payoff amount for the title loan. This is the total amount you owe on the loan, including the principal balance, accrued interest, and any fees. You can usually find this information by contacting the lender directly.
Sale Price Negotiation: When negotiating the sale price with the buyer, you'll need to consider the payoff amount for the title loan. If the sale price is higher than the payoff amount, you can use the excess funds to pay off the loan and transfer the title to the buyer.
Payment to Lender: Once you've agreed on a sale price with the buyer, you'll need to use the proceeds from the sale to pay off the title loan. This typically involves contacting the lender and arranging for the payoff amount to be paid directly from the sale proceeds.
Transfer of Title: After the title loan is paid off, the lender will release the lien on the car, and you'll receive a clear title. You can then transfer the title to the buyer, either directly or through your state's Department of Motor Vehicles (DMV).
Sale Completion: Once the title has been transferred to the buyer, and any necessary paperwork has been completed, the sale is considered complete. The buyer is now the legal owner of the car, and you are no longer responsible for any obligations related to the title loan.
It's essential to communicate openly with the buyer throughout the process and ensure that all necessary steps are taken to transfer ownership of the car properly. Selling a car with a title loan may involve additional paperwork and coordination, so it's a good idea to consult with the lender and familiarize yourself with the specific requirements and procedures in your state.