by Patrick Sills

Created on: November 06, 2010

In this day and age of high car prices; it is very common for buyers to finance an appreciable portion of the vehicle’s selling price through a bank, credit union, or an automaker’s credit institution. Oftentimes, this holds true even when shopping for well-used cars. They are not as cheap as they used to be, and most of us simply can’t afford to pay for them with cash. Instead, we are forced to chip that principal and accrued interest away by making monthly payments.

Such a process can take anywhere from 2-7 years; depending on how much we’ve borrowed and the chosen length of our loan term. Sometimes, things can happen along the way. Perhaps the payments are putting a strain on our lifestyle and we need to unload that monthly obligation. It‘s even possible to discover that the car you bought has turned out not to meet your expectations. It could be too small or burn too much gas. In the worst-case scenario, it could be a lemon that spends more time at the repair shop than on the road.

Thus, for whatever reason, you’ve decided to sell the car. But if it is still being financed, how can this be accomplished? The easiest way to “sell” a car still being financed is to trade it in at a dealership. In these instances, any remaining balance is simply carried over to the car you are replacing it with, but we’ll assume that you wish to sell the car outright. For one thing, trading in almost always means that your new payment will be higher and/or be spread out for a longer period of time. Thus, and obviously, if you’re trying to reduce your payment, this is not the way to do it.

It’s not as difficult to sell a car still under lien as one may be led to believe. The first step that must be taken is as follows: Contact the lending institution and find out how much you still owe on the car. This cannot be done by simply multiplying your payment by the number of months remaining because this includes interest. In other words, if the vehicle was paid off today, the balance will be less.

Secondly, if you expect to have success selling the car, you must price it fairly. Find out how much your vehicle is worth by either looking your make and model up in a reputable guide such as the Kelley Blue Book or by having it appraised by an insurance adjustor or dealership. Factors such as condition, geographic location, and mileage also must be taken into consideration.

Now here’s where things can become complicated.

• 1
• 2
• Next Page >>