Because there's a lien against your car until it's paid off, it's very difficult to sell it privately unless you can pay off the balance on your own. But trading in a car with negative equity is very simple for a dealership, within reason.
Can you sell a car if you still owe money on it?
Yes, you can sell a car with a loan on it. But as long as the loan exists, the lender has a lien on the car, meaning the lender has first rights to the car until you fully pay off the loan. Because of that, most people are wary about buying a car with money owed on it, so it can be hard to find a buyer.
How do I sell my car if its on finance?
- Sell it to a private individual. You can either pay off the car loan first or use the profits to pay off your lender.
- Trade it in at a dealership. You can trade in your car for a vehicle of similar value and roll your old loan into a new deal.