Selling a car with a lien
You could have the buyer go to the bank with you so that he can get evidence that the loan will be paid in full and that the lien will be lifted. The bank won't sign over the title (and lift the lien) until the loan is paid back in full. DMV.org has a pretty good section about this. (Note: not affiliated with the actual DMV) Selling to a Private Party Though more effort will be required on your part, selling a car with a   lien privately could net you a higher profit. Here are a few things   you'll need to consider to make the process easier:  Include the   details of the lien in your listing. You'll list an advertisement for   your car just as you would any other vehicle, with the addition of the   lien information that buyers will need so as to avoid confusion.  Sell   in the location of the lienholder, if possible. If the bank or   financial institution holding the lien is located in the area you're   trying to sell, this will make the transaction much easier. Once you   make an agreement with the buyer, you can go directly to the lender to   pay off the existing lien. Ownership can then be transferred in person   from the financial institution to the buyer.  Consider an escrow   service. If the financial institution isn't in your area, an escrow   service can help to ensure a secure transaction. An escrow service   will assume responsibility for receiving payments from the buyer and   will hold the title until the purchase is complete. Advantages of an   escrow service include: Payoff services, which will do most of the   work with the financing institution for you. Title transfer services,   which can help to ensure a safe and legitimate transaction and provide   the necessary paperwork once the sale is complete.
The other person has to decide that they want to be wholly responsible for the loan, and they have to be able to qualify for the loan. They are in essence purchasing the car from you with the sale price being the remaining balance of the loan.  You will then use the processed from the new loan to pay the old loan off completely. They will then take the bill of sale to the state DMV/MVA to register the car in their name. You should have them start with their bank for a new car loan. I've been an F&I Manager at a new car dealership for over ten years, and I can tell you this with absolute certainty, your deal is final. There is no legal obligation for you whatsoever. I see this post is a few weeks old so I am sure by now you already know this to be true, but for future reference in case someone in a similar situation comes across this thread, they too will know. This is a completely different situation to the ones referenced earlier in the comments on being called by the dealer to return the vehicle due to the bank not buying the loan. That only pertains to customers who finance, the dealer is protected there because on isolated occasions, which the dealer hates as much as the customer, trust me, you are approved on contingency that the financing bank will approve your loan. That is an educated guess the finance manager makes based on credit history and past experience with the bank, which he is usually correct on. However there are times, especially late afternoon on Fridays when banks are preparing to close for the weekend the loan officer may not be able to approve you before closing time, in which case the dealer allows you to take the vehicle home until business is back up and running the following Monday. He does this mostly to give you sense of ownership, so you don't go down the street to the next dealership and go home in one of their vehicles.  However, there are those few instances for whatever reason the bank decides your credit just isn't strong enough for the rate agreed upon, so the dealer will try everything he can to either change to a different lender, or sell the loan at a higher rate which he has to get you to agree upon. If neither of those two things work, he will request that you return the car. Between the time you sign and the moment a lender agrees to purchase your contract the dealer is the lien holder, and has legal rights to repossession, in all 50 states. Not to mention you will sign a contingency contract before leaving that states you are not yet the owner of the car, probably not in so many simple words though, but it will certainly be in there before they let you take a car before the finalizing contract is signed.  Now as far as the situation of the OP, you purchased your car for cash, all documents signed, the car is yours, plain and simple. It doesn't matter what state you are in, if he's cashed the check, whatever. The buyer and seller both signed all documents stating a free and clear transaction. Your business is done in the eyes of the law. Most likely the salesman or finance manager who signed paperwork with you, noticed the error and was hoping to recoup the losses from a young novice buyer.  Regardless of the situation, it is extremely unprofessional, and clearly shows that this person is very inexperienced and reflects poorly on management as well for not doing a better job of training their employees. When I started out, I found myself in somewhat similar situations, both times I offered to pay the difference of my mistake, or deduct it from my part of the sale. The General Manager didn't take me up on my offer. He just told me we all make mistakes and to just learn from it. Had I been so unprofessional to call the customer and try to renegotiate terms, I would have without a doubt been fired on the spot. I'd not do business under these terms. A bill of sale needs a signature, right? Your signature is your word, and your word is your bond. I wouldn't participate in such a fraud, nor would I accept this sum of cash, who knows its origins? "You say  Also I have been the only one with an income in our household for last 15 years, so for most of our marriage any debts have been in my name. She has a credit card (opened in 1999) that she has not used for years and she is also a secondary card holder on an American Express card and a MasterCard that are both in my name (she has not used the cards as we try to keep them only for emergencies). This would seem to indicate that the dealer is correct.  Your wife has no credit history.   You say that you paid off her student loans some years back.  If ""some years"" was more than seven, then they have dropped off her credit report.  If that's the most recent credit activity, then she effectively has none.   Even if you get past that, note that she also doesn't have any income, which makes her a lousy co-signer.  There's no real circumstance where you couldn't pay for the car but she could based on the historical data.  She would have to get a job first.  Since they had no information on her whatsoever, they probably didn't even get to that." In a perfect world scenario you would get a car 2-5 years old that has very little mileage.  One of the long standing archaic rules of the car world is that age trumps mileage.  This was a good rule when any idiot could roll back an odometer. Chances are now that if you rolled your odometer back the car was serviced somewhere, had inspection or whatever and it is on a report.  If seller was found to do this they could face jail time and obviously now their car is almost worthless. Why do I mention this?  Because you can take a look at 2011 cars.  Those with 20K miles go for just a little more than those with 100K miles.   As an owner you will start incurring heavy maintenance costs around 100K on most newer cars. By buying cars with lower mileage, keeping them for a year or two, and reselling them before they get up in miles, you can stay in that magic area where you can drive a pretty good car for $200-300 a month.  Note that this takes work on both the buying and selling side and you often need cash to get these cars (dealers are good about siphoning really good used cars to employees/friends).   This is a great strategy for keeping costs down and car value up but obviously a lot of people try to do this and it takes work and you have to be willing to settle sometimes on a car that is fine, but not exactly what you want. As for leasing this really gets into three main components: If you are going to do EVERYTHING at a dealership and you want something new or newish you might as well lease.  At least then you can shop around for apples to apples.  The problem with buying a new/used car from the dealers in perpetuity isn't the buying process.  It is the fact that they will screw you on the trade-in.  A car that books for 20K may trade-in for 17K.  Even if the dealer says they are giving you 20K, then they make you pay list price for the car.   I have many many times negotiated a price of a car and then wife brought in our car separately and I can count on ZERO fingers how many times that the dealership honored both sides of the negotiations.  Not only did they not honor them but most refused to talk with us after they found out.   With a lease you don't have to worry about losing this money in the negotiations.  You might pay a little extra (or not since you can shop around) but after the lease you wash your hands of the car.   The one caveat to this is the high-end market.  When you are talking your Acura, Mercedes, Lexus... It is probably better to buy and trade in every couple years.  You lose too much equity by leasing, where it won't cover the trade-in gap and cost of your money being elsewhere.  I have a friend that does this and gets a slightly better car every 2-3 years with same monthly payment.   Another factor to consider is the price of a car.  If your car will be worth over $15K at time of sale you are going to have a hard time selling it by owner.  When amounts get this high people often need financing.  Yes they can get personal financing but most people are too lazy to do this.  So the number of used car buyers on let's say craigslist are way way fewer as you start getting over $10-12K and I have found $15K to be kind of that magic amount.   The pro-buy-used side is easy.  Aim for those cars around $12-18K that are out there (and many still under warranty).  These owners will have issues finding cash buyers.  They will drop prices somewhere between book price and dealer trade-in.  In lucky cases where they need cash maybe below dealer trade-in.  And remember these sellers aren't dealing with 100s let alone 10 buyers.  You drive the car for 3-4 years.  Maybe it is $7-10K.  But now you will get much much closer to book price because there will be far more buyers in this range. Your first step is to talk to the current lender and ask about refinancing in the other person's name. The lender is free to say no, and if they think the other person is unlikely to pay it back, they won't refinance. If you're in this situation because the other person didn't qualify for a loan in the first place, the lender probably won't change their mind, but it's still worth asking. From the lender's point of view, you'll be selling the other person the car.  If they qualify for a loan, it's as simple as getting the loan from a bank, then doing whatever is required by your state to sell a car between either private parties or between relatives (depending on who the other person is). The bank might help you with this, or your state's DMV website.  Here are a few options that don't involve changing who is on the loan: Taking out a loan for another person is always a big risk. Banks have entire departments devoted to determining who is a good credit risk, and who isn't, so if a person can't get a loan from a bank, it's usually for a good reason.  One good thing about your situation: you actually bought the car, and are the listed owner. Had you co-signed on a loan in the other person's name, you'd owe the money, but wouldn't even have the car's value to fall back on when they stopped paying. It seems like there are  a few different things going on here because there are multiple parties involved with different interests. The car loan almost surely has the car itself as collateral, so, if you stop paying, the bank can claim the car to cover their costs.  Since your car is now totaled, however, that collateral is essentially gone and your loan is probably effectively dead already.  The bank isn't going let you keep the money against a totaled car.  I suspect this is what the adjuster meant when he said you cannot keep the car because of the loan. The insurance company sounds like they're going to pay the claim, but once they pay on a totaled car, they own it.  They have some plan for how they recover partial costs from the wreck.  That may or may not allow you (or anyone else) to buy it from them.  For example, they might have some bulk sale deal with a salvage company that doesn't allow them to sell back to you, they may have liability issues with selling a wrecked car, etc.  Whatever is going on here should be separate from your loan and related to the business model of your insurance company.  If you do have an option to buy the car back, it will almost surely be viewed as a new purchase by the insurances company and your lender, as if you bought a different car in similar condition. I'm a little confused by your question to be honest. It sounds like you haven't sold it to him, but you have a verbal arrangement for him to use the car like it's his. I'm going to assume that's the case for this answer. This is incredibly risky. If you've got the car on credit and he stops paying, or you guys break up... you will be liable for continuing to make payments! If the loan is in your name, it's your responsibility. Edited. The credit is yours. If he decides to stop paying, you're a little stuck. The Nebraska DMV web site has a neat page about this. It seems to be fairly simple, and not costly to record a lien and later release it. Just go there with the title and the sales agreement that details the terms, and pay the $7 fee. Check the employee-friends-and-family sales contract, which your friend should be able to get quite easily. There is almost always a minimum holding period before resale clause, specifically to prevent this kind of scenario. Without that clause, the dealers tend to riot... Also, remember that a car loses a huge percentage of its value the moment it leaves the lot. Odds are that you'd be doing well to find someone willing to buy it from you at the discounted price. If you don't want this car, ask your friend not to buy it and get one you do want. Seriously. "Imagine that, a car dealership lied to someone trusting.  Who would have thought. A big question is how well do you get along with your ""ex""?  Can you be in the same room without fighting?  Can you agree on things that are mutually beneficial? The car will have to be paid off, and taken out of his name.  The mechanics on how to do this is a bit tricky and you may want to see a lawyer about it.    Having you being the sole owner of the car benefits him because he is no longer a cosigner on a loan.  This will help him get additional loans if he chooses, or cosign on his next gf's car. And of course this benefits you as you ""own"" the car instead of both of you. You will probably have to refinance the car in your name only.  Do you have sufficient credit?  Once this happens can you pay off the car in like a year or so? If you search this site a similar questions is asked about once per month.  Car loans are pretty terrible, in the future you should avoid them.  Cosigning is even worse and you should never again participate in such a thing. Another option is to just sell the car and start over with your own car hopefully paid for in cash." I wouldn't say this is a lie.  Person 2 just made themselves the offer of 38k.  If it sells then they were outbid.  If it doesn't sell then they're stuck with the asset as if they had bid themselves.  They're paying themselves, or they're representing a party that is paying themselves.  That balances out to a $0 profit/loss + ownership of the asset.   I think something like this would be unethical:   Person 1: I'll buy your car for 30k  Person 2: Okay  Person 3:That's my car! Your best bet would be to add your name to the title through the bank or have her sell it to you for the amount she owes then you get a loan for that amount like they said before. If you guys split up at this point she'll legally get to keep the car you've been paying for. You could apply for a new loan and have her cosign but it'll make your monthly payments higher. Have her sell you the car for the amount owed them you get a loan for that amount. Since you are together and you've been paying for it you won't lose any money and your monthly payments won't be expensive if you don't owe that much on the car. Pretty much having her sell it to you would be the smartest idea cause keeping Her name on the title will allow Her to legally drive away in your car if you split and you don't want that lol In some states there are significantly higher automobile insurance costs and higher coverage requirements for vehicles that have a lien on them.  I suspect this is not your scenario, or you probably would not be considering holding the loan open.  But it is something to consider. If you live in a state where insurance coverage and costs depend on a clear title, I would certainly recommend closing the loan as soon as possible. "My take on this is that with any short-selling contract you are engaging in, at a specified time in the future you will need to transfer ownership of the item(s) you sold to the buyer. Whether you own the item(s) or in your case you will buy your friend's used  car in the meantime (or dig enough gold out of the ground - in the case of hedging a commodity exposure) is a matter of ""trust"". Hence there is normally some form of margin or credit-line involved to cover for you failing to deliver on expiry."