Is It Legal to Sell a Car with a Title Loan on It?

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Sometimes when you are in the process of paying back a car title loan, there may come a point where you are interested in selling your vehicle despite still having outstanding debt left on the title. Naturally this will raise quite a few questions as things are not as simple as simply receiving money for the car and handing over the keys and the title.

Luckily, Max Cash Title Loans is here to help you have a better understanding of whether it is legal to sell your car while you are repaying a car title loan on it.

Selling Your Car When You Have a Title Loan on It

It is legal to sell your car while you still have a car title loan on its title. However, this is neither an easy nor a quick process. There are multiple stipulations and rules that must be adhered to when going about the whole process in order to keep everything on the up and up for everyone involved.

When you are in the process of paying back a car title loan, the lender will place a lien on your vehicle, which means the car’s title belongs to the lender until the loan has been repaid. A car title loan uses your car’s title as collateral, meaning the lender has a way to make sure they get their money back when it is due. Until you pay off the entire loan, the title remains in their possession.

Transferring the Car Title During a Car Title Loan Repayment

When you have a lien placed on your car’s title from a car title loan, you cannot transfer your title to the person whom you are selling the vehicle to. Your lender will still have their name on the title and will not relinquish it until you have fully repaid your car title loan. Additionally, when you go to submit the title change, the Department of Motor Vehicles (DMV) will be immediately notified of any holds or liens that it may have on it. The DMV will stop any transfers if there are any liens on the title.

That said, you may end up having a rather difficult time selling your car to anyone other than close friends or family if you are unable to transfer the title to them right away. If you are planning to use the money to pay off the rest of the loan, you should bring that up with the person you are potentially selling to.

How to Sell Your Car While Repaying a Car Title Loan

Trying to sell your car while you are still making car title loan payment scan be tricky. Consider waiting until you have repaid what you owe before attempting to sell your vehicle to someone else. As mentioned, you cannot actually transfer legal ownership until you pay off the loan. Once you have finally done so, you could go about the deal without any stress or concerns.

If you need to pay back your car title loan faster to sell your car, there are a variety of ways to go about it. Depending on your current circumstances and resources, you could obtain the money you need to repay your car title loan by using any of the following methods:

  • Getting a part-time job (if you have the time to do so).
  • Make use of your vehicle’s back seat by being a ride share driver (e.g. Lyft, Uber).
  • Sell any of the items that you have lying around your house that you do not have any use for. Have a yard/garage sale, sell items to friends or family, or sell your items through an online marketplace such as Craigslist, Amazon, Facebook Marketplace, eBay, etc.
  • If you have the time, ability, and resources to do so, you could always find a way to set up your own small home-based business that you could efficiently and cheaply operate by yourself or with a minimal amount of outside assistance.

Speak with Max Cash Title Loans

If you have any questions regarding a past, present, or future car title loan or you need to talk to us for any other reason, you can reach out to Max Cash Title Loans by:

  • Calling or texting us directly at 1-855-561-5626
  • Emailing us at info@maxcashtitleloans.com
  • Writing to us at 1270 E. Broadway Rd. Suite 208, Tempe, Arizona 85282