Selling A Car That Youare Financing
So - you want to sell your car and buy a new one, but you’ve still got a car loan outstanding on your vehicle? No problem. This is something lots of people experience, and there are various solutions out there. I’m going to run through some just now. It used to be that if you were in this situation your only option was to keep the car and keep making payments until the loan was cleared. Today though, there are dealers out there who will take over your loan payments when you buy a new car from them.
That’s fine, but how can you make sure you get what the car is worth, and how do you actually go about selling a car that’s covered by a loan agreement? First off, you need to get a figure for how much of the loan is still outstanding. If you can clear this yourself, from savings or another source, before you sell the car, that’s probably going to give you the best deal. Once you’ve paid off the loan, and you have full title to the car, you can sell it in whatever way you choose.
Unfortunately, most people just don’t have that sort of cash sitting around, so it’s not an option. Furthermore, if you need to take out a new auto loan while you’re still under your first loan, bad credit will mean you will probably be refused. When you’re in this sort of situation there’s still plenty you can do - though it can be a bit more complex.
You can try to sell the car for at least what the payoff amount of your current loan is. This would entail not being able to give your potential buyer the title free and clear until after you paid off your loan, and the company processed the title and transferred it to you. Some buyers may not be willing to go through the hassle.
Another option is to contact the company your car loan is with and ask them if they will let you use an escrow service to sell your car. This means that when the buyer pays the money, instead of going direct to you it goes to the escrow company acting for the loan company. The loan company then transfers title of the vehicle to the buyer and once that is done they get the money from the escrow company.
Also, if you call up the finance company directly and ask them about the options for selling your car when it is still under a finance deal with them, they may well be able to help. They get this sort of enquiry quite a lot, so know the options - and even if they can’t help you directly, they can almost certainly direct you to someone who can help.
If this seems like too much of a hassle, consider shopping for your new car at a dealership that offers you the chance to get out of your current auto loan. Some dealerships are allowing new customers to trade in their vehicles that are still under financing, and adding some or all of the costs to their new auto loan.
This can work really well - it means you get to drive the new car that you dream of, but you still manage the monthly payments on the loan. If you do this, check out the costs first of all with an auto loan calculator so that you work out what you can afford. When you add your old car loan into a new finance deal it can make the monthly payment go up and might be higher than you’d banked on. So now you know - when you’re thinking of getting a new car and are wondering what to do when your current vehicle is still under an auto finance deal, you’ve got a pick of all the different options!
