Can You Sell Your Car if the Bank has the Title?

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Can You Sell Your Car if the Bank has the Title?

If you’re planning on selling your car yourself and have financed the car through a bank, you may be wondering if you can actually legally sell it with the bank holding its title. The answer is that it can be done, but it does require a lot of effort on your part and also for the buyer to agree to it. So if you want to sell your car without holding the title yourself, make sure to follow the steps below in order:

See How Much You Still Owe 

Before you do anything else, you first need to determine how much you actually still owe on the vehicle. You may have a record of it through your online banking, but if you don’t, simply call up the bank and ask them what the total payoff amount would be on the vehicle. Your bank will usually then provide you with a “10 day payoff amount,” which is the amount that you’ll have to pay within 10 days in order to not incur any further interest charges or penalty fees. In addition, you should also ask your bank if they have any special steps that you have to follow in order to sell your financed vehicle to a third party buyer.


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Reach an Agreement with a Buyer and Pay the Bank

When you advertise your car for sale and find a buyer, you will need to set a sale price that will at least cover what you still owe on the car loan. Once you and the buyer reach an agreement, make sure to send the remaining amount to your bank as soon as possible. Of course, you can also pay the car loan back yourself with your own money, but most people don’t have the disposable income on hand to do so.

Also make sure to only accept actual cash, a certified money order, or a certified check from the buyer. If the buyer is using a car loan to pay for it, you will most likely have to sign various loan documents to make the sale legal and official. Don’t forget to give the buyer a Bill of Sale.

Have the Title Transferred Over to the Buyer 

You will need to make sure that the car title is transferred over to the buyer. This can be done by providing your bank with the buyer’s address. Only have the title transferred over to the buyer once you have received the payment. An additional thing to keep in mind is that if the buyer is paying with the assistance of a car loan, your bank will have to transfer it over to the buyer’s  bank.

Ultimately, selling your car when the bank has the title can be done, but with the caveat that it will require some additional steps. You should always be clear about the situation with the buyer right from the very start and to be transparent in your communication in order to ensure a smooth transaction. Good luck!

Joe Webster

Written by Joe Webster

Joe Webster began his journey in the auto transport field by attending the University of Southern California (USC), where he graduated with with a Bachelor of Business Marketing.

After college, he started his career in the auto transport industry from the bottom up and has done virtually every job there is to do at A-1 Auto Transport, including but not limited to: Truck Driver, Dispatch, Sales, PR, Bookkeeping, Transport Planner, Transport Manager, International Transport Manager, Brokering, Customer Service, and Marketing. Working with his mentor Tony Taylor, Joe Webster has learned the ins and outs of this industry which is largely misunderstood.

With over 30 years experience in the industry, we've been helping people ship their vehicles, motorcycles, RV's, heavy equipment, household goods and more across the country or overseas without a hitch. Ask us anything.

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