Can You Sell Your Car with a Title Pawn?
February 13, 2019 | By Louis Tully
As if selling your car wasn’t going to be complicated enough, imagine trying to let your clunker go with a lien slapped on the title! The fact is, if you’re still repaying on your title pawn, you’ll need to pay it off in full before you can even think about selling your wheels to someone else. But it’s not all bad. There are ways you could still let your car go for cash with very little toil and tussle.
But first things first – in order to sell the car you used to get a title pawn, you’ll need to do two things:
- Pay off your title pawn.
- Transfer your car’s title to the buyer.
How smoothly the selling process goes will depend on who you’re selling to and the lender holding your title. You will need to make sure that both parties are on board with the transaction.
Talk to Your Lender
In order to get the ball rolling, you’ll first need to speak with your lender about your title pawn and find out how much you need to pay it off. Paying off your title pawn will remove the lien on your car, making it free for you to sell. You could also ask them how to go about selling the car, since they’re currently holding the title. Because selling your car would lead to paying off the title pawn, the lender will likely be willing to help.
Find Out the Payoff Amount
The first part is easy: find out the payoff amount for your title pawn. In order to clear your title, you’ll need to know the exact dollar amount that needs to be paid back to your title pawn lender. They’ll happy to go over this information with you.
Ideally, you can pay off this amount before starting the car-selling process, but in all likelihood, you’ll need to at least sell your car for the amount owed on the title pawn in order to break even. If the car holds enough value, however, you might be able to sell it for more and pocket the extra cash, which you could then put towards a new ride.
When it comes to finding out what the payoff amount is, ask your lender for this information in writing (also known as a payoff letter). The payoff letter should include everything from the payoff amount to the payment instructions. It should even include a breakdown of charges and fees, so you can see what exactly you’re paying for. Any pending changes to your payoff amount should be included as well.
Clear the Title
The reason you need to pay off your title pawn before you can sell your wheels is due to the fact that you’ll need to hand over the title to the buyer. You won’t be able to complete the sale otherwise.
To hand off the title to somebody else properly, you’ll need to sign the back of the title. This shows that you are transferring your ownership rights to the new buyer. In many states, the title alone gives the buyer everything needed to register the car in their name. This is because it includes the following:
- The sale date
- The purchase price
- Signatures from both the buyer and seller
As you might have guessed by now, paying off your title pawn is crucial, since you’ll need a lien-free title in order to sell your car. In fact, most people will not buy a car from you if you can’t provide a clear title from the get-go. Of course, some will be willing to work with you as long as you can assure them that the title will be cleared once the transaction has been completed.
Paying Off the Title Pawn
If you have the means, the best way to go about selling your car with an open title pawn attached to it is to get rid of the title pawn first. In other words, pay off the title pawn. But chances are, the only reason you’re selling your car in the first place is because you can’t pay off the title pawn otherwise. If this is your case, then be sure to let any potential buyers know your situation. You should speak with the title pawn lender as well. Keeping everyone in the loop will help make the car-selling process go as smoothly as possible.
But if you really just wanted to sell your car regardless and paying back the title pawn is just a bonus, then you should first try to do anything you can to pay off the title pawn before going any further. There are several ways you could approach this:
- Sell your junk: These days, selling your hand-me-downs is really easy. Handy apps like Let Go and Offer Up can help you turn your clutter into cash with very little effort.
- Ask friends or family: If you’re struggling to pay off the title pawn, ask your friends or family for help. You’d be surprised to see how many you have standing in your corner when you call for help.
- Pick up a part-time job: There’s no shame in juggling two jobs. In fact, most people work after hours just to get by. If picking up a part-time job on the side means paying off your title pawn, it’s well worth it.
- Odd jobs work too: If a part-time job doesn't mesh with your schedule, you could always make a little extra money with these 6 side jobs. Anything from babysitting to Uber driving counts.
- Raise the money: If you’re not able to find work and your options are getting limited, you could always try raising the money. Start a GoFundMe page and ask for donations. There’s nothing wrong with raising the money as long as you’re transparent about what you’re raising it for.
- Take out another loan: If you can get someone to co-sign on a loan with you, you may be better off doing so. Paying the title pawn off with another loan may sound crazy, but there’s a method behind the madness. The fact is, most traditional loans offer longer repayment periods along with lower rates.
- Dip into savings: If you happen to have a lot set aside for retirement already, it might not be the worst idea to look into using it now. You could always put the money back once your car is sold.
Getting Ready to Sell
Whether you were successful in paying off the title pawn or not, you’re still going to want to get the most cash for your car. You wouldn’t want to sell your car for any less than it’s worth, right? With that said, look to Kelley Blue Book to find your car’s current market value. Once you’ve done your research, go ahead and slap on a price and get ready to haggle. Most folks won’t offer you the asking price. For this reason, it may even be wise to start off by asking for more than the market price.
Once you’ve attracted a potential buyer, be sure to fill them in on the title situation and do your best to assure them that the title will be cleared once the transaction is over. You can even take them over to the title pawn lender if you have to. After the sale, you can use the money to pay off the title pawn, clear the car’s title, and then proceed to hand over the title to the new car owner. If you manage to pocket a little extra cash after it’s all over, then it’s a win, win, win!