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Selling a Car That Still Has a Lien on It

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Selling a car with a lien on it can be challenging and require additional steps. The car has a lien on it because of one of several financial commitments. Therefore, to have the lien removed, it will be required that you have these financial obligations fulfilled. 

Why You Might Have a Lien

There are many reasons why a lien might be on your title. You may have financed the car, so the bank may have a lien on it. You may have had repairs made to your car that you haven't paid for yet. Or, you may have received a loan and used your vehicle as collateral, such as with a title loan. However, by selling your vehicle, you will likely be able to pay the debts that are owed, and this will allow you to have the lien removed from your title. 

Handling Upside-Down Debts

The greatest challenge, however, is when the loan is upside down. This is when you owe more on your car than it is worth. And even if you are not upside down on the loan, you may have to sell your car at less than what it is worth if you are desperate to sell the car but are not able to find a buyer. Under this circumstance, you will be forced to make up the difference before the lien is removed from the car and the debt obligations are satisfied. 

Removing the Lien

When advertising the car, make sure to clarify that there is a lien on it. Once the buyer or his or her lender has paid for the full purchase price of the car, you will want to travel directly to the lienholder to pay any debts that are owed and pocket whatever is left over. Once the lien has been removed, the car can be sold with no more hassles.

One way to make it easier to sell a car with a lien is to carefully choose the car buyers who you will sell your car to so that you are selling to a buyer who is serious about buying. To accomplish this, you should perform a background check on the car buyer as early as possible to verify that he or she has the credit to finance the car. Fortunately, there are auto-dealer credit-report services that can handle running a background check for you and make the process easier.