Buying a new vehicle can be exciting. Before you can hit the open road, however, you might need to sell the old car. If you still owe on your previous vehicle, this might present a slight problem. How you handle it depends on the amount left on the loan, what the car is worth and how you plan to sell it. With the following tips, you can get a better idea of how to sell a car with a loan.

Can You Sell a Car with a Loan? 

It is entirely possible to sell a car with a loan. Many dealerships handle it as a matter of practice. If you’ve outgrown your current ride, consider trading it in for an upgrade. In many cases, it is easier to sell a car to a dealership than in a private sale. However, if you have a buyer who is offering an amount that would cover any remainder on a loan, that is an option too.

Steps for Selling a Financed Car 

The way to sell a financed car often depends on your loan amount and the car’s value. Do your research in advance to help you determine next steps.

1. Find Payoff Amount

The first thing you should do is determine what you still owe on the loan. The total payoff amount might be a little higher than expected, usually to factor in the interest accrued between the last payment and the next one. If you have an online account for the lender, you may be able to get this information electronically.

2. Estimate Value

Do some research online to get a sense for what your car is worth. Keep in mind that you need to input the exact trim level, model year and the mileage to get the most accurate estimate. This step may not tell you exactly what a buyer or dealer would be willing to pay, but it can give you a range to get started.

3. Determine Your Equity

It is relatively simple to determine if you have negative or positive equity. Positive equity means that the car is worth more than you owe on the loan. Negative equity means that the vehicle is worth less than the loan, which is not uncommon. If you have negative equity, you might have to pay out of pocket to cover the rest of the loan. However, it is possible to wrap the payoff amount into the next loan for your new vehicle.

4. Work With the Lender and Buyer 

While private buyers might be willing to pay higher value for your vehicle, you may have to wait a while to find one. If you want a straightforward transaction, it may be better to go with a dealership that already has a process in place. Get your car ready for sale, making sure it is clean and ready to transfer ownership. These preparations can make it easier to get an accurate estimate of its value and give you the maximum amount for the trade. 

Financing a new car doesn’t have to be difficult, even if you need to trade in a vehicle that still has a loan. To find out more about the benefits of Buy Here Pay Here financing from JDBNOW, contact an expert today.