How to get rid of a car loan
When you buy a car, but you do not have the funds for the full purchase price, you can take out a loan through a bank or lender. You make payments for the amount due in accordance with the agreed sales contract. The loan agreement contains...
When you buy a car, but you do not have the funds for the full purchase price, you can take out a loan through a bank or lender. You make payments for the amount due in accordance with the agreed sales contract.
The loan agreement contains many conditions of sale, including:
- Credit term
- The amount of your payments
- Payment schedule (weekly, biweekly or monthly)
There are several situations that may arise when you may want to pay off your car loan or have someone else take over your car payments. These situations include:
- You can no longer afford to pay for a car
- Desire for another car
- Moving to a place where you don't need a car
- Inability to drive for medical reasons
Whatever the reason you want to get rid of your car loan payment, there are several ways to approach the situation.
Method 1 of 3: pay off the loan
This may seem like an overly simplistic solution, but many people who have a loan do not know many of the details. Buying a car is overwhelming, and it's entirely possible for details to be forgotten or not fully explained in the excitement of buying a car.
Step 1. Contact your lender. Determine how much money you still owe on your car loan.
Most car loans are open loans and can be repaid at any time.
If you have the money to pay off your car, whether it's a job bonus or an inheritance, you can usually contact your lender and arrange for the balance of the loan to be paid in full.
Step 2: Pay off the loan. When you have the amount of money ready, make an appointment with the lender and pay off the car.
Early repayment of a car loan allows you to save interest on the financed amount. It also frees up your income, which is helpful if you are applying for a loan.
Your debt-to-servicing ratio is significantly reduced, making you look better in the eyes of a potential lender.
Method 2 of 3: find a buyer
Auto loans are based on the buyer's credit score and their ability to repay the loan. Lenders will not transfer a car loan to another person without determining their eligibility for financing.
The bank will need:
- Verify the buyer's identity
- Conduct a credit check
- Confirm buyer's income
- Conclude a loan agreement with the buyer
- Remove the arrest from the title of your car.
What you will need to do is:
Step 1: Determine your outstanding auto loan balance. Call your lender and ask for the current loan repayment amount. This is the remaining amount of money that you still need to pay.
- FunctionsA: If you owe more than you expect from the car sale, you can add funds from your bank account after the car sale to pay off the loan in full. Car loan debt greater than the value of your car is called "negative equity."
Step 2: Advertise your car for sale. You will need to put your car up for sale by posting ads targeted at potential buyers.
- FunctionsA: You can use websites on the Internet such as Craigslist, AutoTrader, print ads in the classifieds section of your local newspaper, or print flyers for posters on community bulletin boards.
Step 3: Discuss the purchase price with a potential buyer. Remember that you need to receive a certain amount in order to repay the loan.
Step 4: Fill out the bill of sale. Complete the bill of sale with the buyer for the agreed sale price.
- AttentionA: Make sure the bill of sale contains contact information for both parties, a description of the vehicle, and the VIN number of the vehicle.
Step 5. Contact your lender. Let them know that you are selling your car and need to make arrangements to remove the deposit on your car.
The liens are the rights to a vehicle owned by the lender while the loan payments are still being made.
The loan officer will review the details of the sale and release the lien when the bill of sale is drawn up.
Step 6: Receive full payment from the buyer. If the buyer is going to make payments for your car, he will need to get financing from a credit institution.
Once they receive a loan, they will be required to make payments on that loan for you.
Their car payment can be very different from your payment depending on many criteria, including:
- The term they chose
- The interest rate they received from their lender
- The amount of their down payment
Step 7: pay off the loan. Bring full payment on the loan to your own lender, who will then cancel the loan if it has been paid in full.
After the full payment of the loan, you will no longer need to pay for the car!
Method 3 of 3: Trade in your car
If you have enough capital in your car, you can trade it in for a car of lesser value and walk away without paying.
Step 1: Determine the buyback amount of your car. Contact your lender and request the total amount of the ransom along with the repayment fee.
Step 2: Find out the trade-in value of your car. Check the estimated rental value of your car on the Kelley Blue Book website.
Accurately enter your vehicle details with correct parameters and accurate mileage. The website will generate an estimate based on the model, year, mileage and condition of the vehicle.
Print out the results and take them with you when you go to the dealership.
Step 3. Talk to the seller or manager. Be clear about your intention to rent your car to the dealership and get the car without a loan.
Step 4: Have your vehicle appraised by a sales manager. When you bring your car to the dealership where you want to sell your car, the sales manager will estimate the value of your car.
- FunctionsA: At this point, you should try to negotiate the best price for your car. You must use your Kelley blue book printout to support your position on the car's value.
The difference between your car's appraised value and the total loan repayment is the capital you have to spend on another car.
For example, if your loan payment is $5,000 and your car is valued at $14,000, you can search for a car worth $9,000 including taxes and fees.
Step 5: Choose a vehicle. Select the vehicle you would like to exchange.
Your options will likely be limited and you may have to choose a car that is a few years older or has more mileage.
Step 6: Fill out the paperwork. Complete the paperwork with the seller to make the sale of your car official.
In your purchase agreement, the dealership will pay off your loan and take your car for sale, and you will receive your new car without a loan.
By following any of the above methods, you will be able to remove the responsibility for further payments on the loan for your car. If you want to make sure that your car has the maximum value at the time of sale or exchange, you can have your car checked by a certified AvtoTachki mechanic. They can come to your place to make sure that all maintenance on your car is completed and that the car runs smoothly for its new owner when sold or traded.
