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Privately selling a car you're still paying off?

The Green Eyed MonsterThe Green Eyed Monster i blame hip hopRegistered User regular
edited August 2008 in Help / Advice Forum
Hey -- a friend of mine is trying to sell a car she's still making payments on. Her asking price is basically just enough to cover the remaining loan amount, primarily to get out of debt on the vehicle.

The main question is -- is there an accepted practice as to how to handle the transaction of paying off the loan to get the title from her bank, then signing the title over to the new buyer? Does anyone have experience with this? All my experience, and everyone I've spoken with, has dealt with selling cars they're already in full ownership of.

If anyone has done this, or knows how people generally handle this type of transaction, from both the buyer and seller perspective, an advice would be great.

The Green Eyed Monster on
wisdom wrote:
if knowledge is power and power corrupts, be smart, be evil

Posts

  • DmanDman Registered User regular
    edited August 2008
    I would just advertise as normal and when I had a buyer, I'd explain the situation, tell them to bring their banking stuff and drive the car I'm selling them to my bank with them.

    They pay you, you pay the bank, you hand over the title and keys to them, they drive away in the car. (well, no sure how the insurance / license part works but I imagine it could be sorted by phone)

    It all goes down in the bank (security&confidence for both parties for free).
    No one gets screwed over, everyone is happy.

  • SeolSeol Registered User regular
    edited August 2008
    celery77 wrote: »
    Hey -- a friend of mine is trying to sell a car she's still making payments on. Her asking price is basically just enough to cover the remaining loan amount, primarily to get out of debt on the vehicle.

    The main question is -- is there an accepted practice as to how to handle the transaction of paying off the loan to get the title from her bank, then signing the title over to the new buyer? Does anyone have experience with this? All my experience, and everyone I've spoken with, has dealt with selling cars they're already in full ownership of.

    If anyone has done this, or knows how people generally handle this type of transaction, from both the buyer and seller perspective, an advice would be great.
    Ask your bank/finance company what their procedures are. That should be step 1.

  • RUNN1NGMANRUNN1NGMAN Registered User regular
    edited August 2008
    If there's a Carmax around her, they will handle all this for her. You can go in there and get an estimate with no strings attached, and if their estimate is what she was going to try and sell it for she's saved herself a lot of trouble.

  • taerictaeric Registered User, ClubPA regular
    edited August 2008
    We did this recently. The purchaser gave us the cash. We sent a check to the bank paying it off, and when we got the title a week later signed his name onto it. You can expedite this if you have the stuff done at the bank, but there is little need to do this if someone doesn't want it that way. (Make sure both parties have copies of all sale records and such.)

    Also, if they give you a check over 10k, you could have to do some extra paperwork to show that it is not extra income for the year. (That is, the 10k was offset entirely by the exchange of value in the car.) (You can get around this by just depositing less than 10k at a time, I believe.)

  • The Green Eyed MonsterThe Green Eyed Monster i blame hip hop Registered User regular
    edited August 2008
    Thanks everyone for all the feedback. Sounds like it works more or less how I figured.

    wisdom wrote:
    if knowledge is power and power corrupts, be smart, be evil
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