Can You Transfer Your Car Loan To Someone Else – Written by Holly D. Johnson Written by Holly D. JohnsonArrow Right Author Holly Johnson Award-winning author Content expert on personal finance, credit cards, loyalty and insurance. In addition to writing for and for CreditCards.com, Johnson continues to work for clients including CNN, Forbes Advisor, LendingTree, Time Magazine and more. Connect with Holly D. Johnson on Twitter Twitter Connect with Holly D. Johnson on LinkedIn Linkedin Holly D. Johnson
Edited by Chelsea Wing Edited by Chelsea WingArrow Right Student Loan Editor Chelsea has been with us since the beginning of 2020. She has invested in helping students navigate the high cost of college and remove the hassle of student loans. Connect with Chelsea Wing on LinkedIn Linkedin Chelsea Wing
Can You Transfer Your Car Loan To Someone Else
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Once you have made the final payment on the car loan, you will need to obtain a title deed from your lender to prove that you are the legal owner of the car. This title is also an important document when you finally sell your car.
A loan is a note that shows that your car is legally owned by the other party in most cases where you lend your money. In many ways, sitting on your car is comparable to sitting on your house. With a guarantee in place, the lender has the right to the car until you repay what you borrowed, including interest and fees.
When your loan is fully repaid, the debt on your car title is lifted and the title can be released to you. At this point, legal ownership of the car passes from the lender to you.
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When you pay off your car loan, the lender is required to notify your state Department of Motor Vehicles (DMV). They can do it electronically or by submitting documents that require a specific status. In any case, let your state know that you no longer have the balance on your loan and are the sole owner of the car.
“After you’ve paid off your car loan, you’ll have the title ‘Free and Clear,’ which means you now fully own your car,” says Julie Shinn, Deputy Chief Loan Manager at RateGenius. . “Every time there’s a change in ownership, you have to update the title.”
The process involved in obtaining a title deed for your paid off vehicle is subject to your state law. Some states take care of it completely, and some states require you to do a depressing job.
According to Shinn, your lender will send you a release in the state where you must register to get your title. This includes the official documents on which the loan is repaid in full. From here you will take these files to your state DMV to get the title updated in your name only.
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In other states, when the DMV is notified, they will automatically send the title to your vehicle without the need for your part.
In states where you must file to get a new car title in your name, you can expect to get your new license anywhere from 2 to 6 weeks after filing, Shinn says. But because the processing time of each state is different, the process can be longer or shorter.
Nishank Khanna, CFO of Clarify Capital, says that states with DMVs that automatically ship titles can take less than the usual 15 to 30 days. However, the email process and time can drag things out, so be sure to follow up by phone, email, or face-to-face visit if you feel it’s taking too long.
Although it is normal to be responsible for your car, there are some important details to keep in mind. Brian DeChesare of Mergers and Inquisitions, for example, says that, for example, lying on your car can prevent you from selling, or at least make selling more difficult.
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This is based on the fact that you have to repay the car loan and get the title right before you can sell your car and transfer ownership to someone else. You may not have the money to pay for your car before the sale, and if you owe more than your car is really worth, you will have to pay a different price.
DeChesare says the opposite: You can’t get a car title if you buy from a debtor until they pay off the car. This makes buying a car with lying on it a hassle. However, some DMVs have a lie detector feature where you can find out who owns the vehicle and contact them directly.
As a result of these challenges, many drivers simply trade the vehicle responsibly with the dealer when they upgrade. When you trade in your car at a dealership, you will be offered a trade value for your car that will hopefully be more than what you owe. The seller will take care of the transfer of ownership in their name so you can sell your car to someone else, taking them out of the equation completely.
If you’re looking to get your car title after you’ve paid off your car loan, you’re probably doing nothing more than sitting and waiting. But in some states, a trip to the DMV may be in your future.
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However, you should be proud that you have paid off your car loan. Think about your future finances before upgrading to another car with new payments, especially if your car is still in good condition.
Holly Johnson writes expert content on personal finance, credit card, loyalty and insurance topics. In addition to writing for and for CreditCards.com, Johnson continues to work for clients including CNN, Forbes Advisor, LendingTree, Time Magazine and more.
Edited by Chelsea Wing Edited by Chelsea WingArrow Right Student Loan Editor Chelsea has been with Chelsea since the early 2020s.
