A lien against your car's title can make selling the vehicle more difficult, but not entirely impossible. Whether the car lien is the result of the auto's loan not being fully repaid, the car being used as collateral for another loan or because you are still paying of previous repair work, there are ways to sell the car to a new owner.
Know What You Owe
Every financial pro would advise you to know exactly how much debt is represented by the lien on your car's title. The entire dilemma of needing to transfer the title to the buyer can be resolved if the debt is less than you thought, and you can simply pay back what is owed. You will also know whether an existing car loan is "upside down," meaning you owe more than the car is worth.
Dealership Sales
The easier option when selling a car with a lien is to sell the car to a dealership. Used car dealerships, especially those that offer in-house financing, have established financial infrastructures designed to make selling a car with a lien more streamlined. You can choose to sell the car to the dealership for its trade-in value toward the purchase of your next car, or sell the car to the dealership without purchasing from them at all. The choices available are dependent on the specific dealership. Be prepared with information on the current lien and the fair market value of your car.
Private Sales
Selling a car with a lien takes longer and can be more complicated when you choose to sell the car yourself in a private sale. The extra hassle is due to needing to handle all of the lien paperwork yourself, including all or a portion of the purchase price needing to be paid directly to the owner of the lien. Before the sale of your car to a private party can be complete, repayment of the car loan that initiated the lien or a repayment of an outside debt has to be arranged officially. If you owe more than your car is worth, you will need to pay out of pocket for the difference unless you are working with an incredibly generous buyer.
The sale of a car with a lien on it may be more complicated, but it is not impossible. To make the process as easy as possible, working with a dealership may be your best option. However, if you choose to sell your car privately, be prepared to take on plenty of paperwork.
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