When you purchase a car with a loan, it is known as a “financed car”. Selling a financed car is more complex than selling a car that has been paid off in full. However, by following a few simple steps, you can successfully sell your financed car and make sure all parties involved are satisfied with the transaction.

Gather Necessary Documentation

The first step in selling a financed car is to gather all of the necessary documentation. You will need the title, which serves as proof of ownership, as well as any loan documentation related to the car. You should also have the registration for the car, as this will be needed for the title transfer. Make sure to keep all of these documents in a safe place until the sale is complete.

Contact Your Lender

The next step is to contact your lender to discuss your options for selling a financed car. Depending on the terms of your loan, there may be restrictions or requirements that must be met before the sale can take place. For example, some lenders may require that you pay off the loan in full before the sale can proceed. Others may allow you to transfer the loan to the new owner or even waive the remaining balance if the sale price meets certain criteria.

Find a Buyer

Once you know what you can and cannot do with your loan, it is time to find a buyer. Research potential buyers online or advertise your car in local newspapers or online classifieds. Compare offers from different buyers and make sure to ask questions about their financing situation. If they are planning to finance the purchase, make sure to contact their lender to ensure that the loan will be approved.

Negotiate the Purchase Price

Once you have found a potential buyer, it is time to negotiate the purchase price. Make sure to agree on a price that is acceptable to both parties and that takes into account any outstanding loan payments. If the buyer is financing the purchase, make sure to check with their lender to confirm that the loan amount covers the agreed upon purchase price.

Pay Off Your Loan

You will need to use the proceeds from the sale to pay off the loan. Make sure to contact your lender to arrange for the payoff amount and then provide them with the funds. Once the loan is paid off in full, the lender will provide you with a release of lien which you will need to give to the buyer in order to transfer the title.

Transfer Title and Registration

Once you have received the release of lien from the lender, you can transfer the title and registration to the new owner. The buyer may need to provide additional paperwork to the DMV in order to complete the transfer. Be sure to keep copies of all paperwork for your own records.

Collect Payment from Buyer

Finally, you will need to collect payment from the buyer. Make sure to receive full payment before releasing the vehicle. You may want to consider having the buyer sign a bill of sale to document the transfer of ownership.


Selling a financed car can be a complicated process, but it doesn’t have to be. By gathering the necessary documents, contacting your lender, finding a buyer, negotiating the purchase price, paying off your loan, transferring the title and registration, and collecting payment from the buyer, you can successfully sell your financed car. Following these steps will help ensure that all parties involved are satisfied with the transaction.

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By Happy Sharer

Hi, I'm Happy Sharer and I love sharing interesting and useful knowledge with others. I have a passion for learning and enjoy explaining complex concepts in a simple way.

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