Selling a car that is still being financed at the bank

[DENZILDON]

Hey everyone,

It's my first time to do this and not sure how to go about it.

I have an 07 CRV that has 2 more years for financing. I want to downgrade to free up some monthly cash. I know I have to pay off what is left on the car loan but how do I go about doing that?

If I want to sell it privately, how will that work since the car has a lien from the bank?

If I go to a dealership, will they take care of the paperwork?

I've always sold my old cars easily since they were all full paid so I have no idea how this one works.

Thanks in advance guys!

[Shlade]

Do you know how much is left owing on the loan?

Theres a guy a little while ago that sold a GT500 for about 15k due to the fact thats all he had left owing on it.

If you really just want to get rid of it and take a hit of what youve paid for it these past couple or so years just try and sell it privately for how much is left owing.

[DENZILDON]

Yes I do, the amount owing is half of the current value of the car.

[lint]

You find a buyer, buyer pays the bank that has the lien, the bank will clear the lien and then cut you a check for the difference.

[DENZILDON]

Thanks for the quick response lint!

So all of this goes down at the bank including paperwork, etc? same day? or a few days to clear buyers cheque?

[Tik-Tok]

Originally posted by lint
You find a buyer, buyer pays the bank that has the lien, the bank will clear the lien and then cut you a check for the difference.

This is the way, you may have a little difficulty finding a buyer, because people are leary of existing leans, and/or don't want the hassle.

Another route would be getting a LOC, paying off the car in full, then selling a lien free vehicle. When it's sold, pay off the LOC.

[max_boost]

Go to the bank with the buyer.

1 cheque to the bank for what's owing.
1 cheque to you for the remaining.

I've done this a few times. No problems at all.

[lint]

that's how I've done it. When they do a lien check they can see who holds it, and it's never been a problem when it's a bank. Not everyone is a baller who can pay cash for a car. The bank will provide lien discharge papers. But if you have the means, do what tik tok says, just makes it easier on the buyer

[DENZILDON]

Got it!

Another one for you, if the buyer is getting a loan to buy the said car. I presume they get a cheque from their bank with the full amount agreed upon? And my bank just cuts me a cheque for the difference?

[Pahnda]

I just sold a car that was still being financed. One bank draft (or certified cheque) for the buyout that goes to the lien holder and one to you for the excess.

I don't know about Honda and how their dealerships get people financed, or how you did it really, but I did my last sale through Glenmore Audi (who I purchased and got financing through) and they gave me a letter right there stating they've received sufficient funds to pay off the loan that should ease any skittish buyers. Again, that may just be because they finance through VW Financial.

If you didn't get financing via the dealership or something the best is probably if you can get them to go to the bank with you... or just get a ton of their information to post on Beyond so we can ruin their life in case they screw you.

[DENZILDON]

@Pahnda - hahaha, true! Beyond Security!

PS: are you on JOC?

[JRSC00LUDE]

If the purchaser makes the cheque out to both you AND the bank/lien holder in the payee line it is sufficient.

The bank will then clear your debt as it relates to that collateral and deposit the remainder in your account. Given that the lien holder's name is a co-payee, the purchaser has the security of knowing the lien must be addressed in order for the cheque to be cleared.

Easy.

[jdmXSI]

or you could get a line of credit to pay off the lein and just have the buyer give you one check and you can payoff your line of credit...

[syeve]

Originally posted by JRSC00LUDE
If the purchaser makes the cheque out to both you AND the bank/lien holder in the payee line it is sufficient.

The bank will then clear your debt as it relates to that collateral and deposit the remainder in your account. Given that the lien holder's name is a co-payee, the purchaser has the security of knowing the lien must be addressed in order for the cheque to be cleared.

Easy.

This is how you should do it IMO...letting the new buyer know how much you owe on the car is none of his business. I'm sure the bank will have no issue with selling the car as long as you deposit the cheque within a day or two.

One thing you should double check is that you have the option to pay back the loan early, most of time it's not a problem, but some loans have payback restrictions.

[DENZILDON]

Thanks for the info everyone!

Now anybody looking for an SUV? Lol!

[Khyron]

Just a bump since I suggested a co-worker try selling privately rather than trade-in (2011 Cruze)

The loan is with RBC (used to be GMAC) but all her banking is at CIBC.

Judging by the prev posts she just needs a bank draft in her name and RBC for the full amount - and RBC will cut her another cheque when she goes to pay it off? As long as the bill of sale also says "free of liens" is that enough?

It's a hassle but a trade for 11-13 vs private for 12-15 is a big diff.

[Tik-Tok]

Originally posted by Khyron

Judging by the prev posts she just needs a bank draft in her name and RBC for the full amount - and RBC will cut her another cheque when she goes to pay it off? As long as the bill of sale also says "free of liens" is that enough?

Also a letter from RBC saying the lien is paid will help her when it comes to a serious buyer.

[Aleks]

I've sold many cars in the past and I've had cases where I've gone to the bank with new buyers and other cases I've sold the car without the lean being brought up.

In those cases I just went and paid off the lean after I got the funds from sale. As long as you're not a scammer it's no problem paying it after.

[nickyh]

I sold one car with a lien.
Buyer paid me with a bank draft and I used my online banking to pay off the car loan after and kept the difference.

[clem24]

Originally posted by lint
Not everyone is a baller who can pay cash for a car.

Did James hijack your account?!?