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Can I Sell My Car If I’m Upside Down On My Loan?

Dave Ramsey

Family Inspiration, Money, & Jobs

Q: How do you sell a vehicle with a lien amount that’s higher than the actual value of the car?

First, you have to find a way to cover the difference between the amount of the lien and what you can get for the car. Let’s look at an example.

If the car is worth $15,000 and you owe $18,000, that would leave you $3,000 in the hole. How do you get out of that car? The bank holds the title, and until you give them the payoff amount of $18,000, you’re not getting the title. The easiest and simplest way would be if you had $3,000 on hand to make up the difference. But if someone comes along and buys the car from you for $15,000, you’ve got to be able to cover the remaining $3,000, right?

Barring the best-case scenario where you actually have the money, you could go to a local bank or credit union and borrow the remaining $3,000. I hate debt, but being $3,000 in the hole is a lot better than $18,000 in the hole. Then, you could turn around and pay back the $3,000 quickly.

After that, you’d give the total amount owed to the bank. They would give you the title, and you could sign it over to the new owner. That’s how it works!

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Dave Ramsey

Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations and The Dave Ramsey Channel on iHeart Radio. Follow Ramsey on Twitter at @DaveRamsey and on the web at