 TITLE: How Much Equity Should I Have in My Car Before I Sell? CONTENT: How Much Is Enough Equity to Sell My Car?\n-----------------------------------------\nBefore selling your car, you'll want to wait until you have enough equity to make a profit from the deal—otherwise, you'll get no benefit from the transaction.\nFor example, if the private-party sale value of your car is $10,000 and you owe $4,000 on your auto loan, you have $6,000 in positive equity. You could sell the car for $10,000 and pocket $6,000 in profit.\nOn the other hand, if the private-party sale value of your car is $4,000 and you owe $6,000 on your auto loan, you have negative equity of $2,000. When you sell the car, the lender gets the $4,000, and you still owe $2,000 on the loan—but you no longer have a car.\nIf you've got positive equity in your car but still owe on the loan, here's how the private sale and trade-in process would work.\n*   **Private buyer**: Because the lender (not you) has title to the car, check with your lender to see how a sale will be handled. Some lenders want you to pay off the loan in full and take title before you can sell the car. Other lenders will let the buyer pay off the loan and send the buyer the title. Buyers will be wary about buying a car that you don't yet have title to, so you and the buyer may need to visit a local office of the lender to handle the transaction in person.\n*   **Trade-in**: When you trade in the car, the dealer pays off the loan and gives you a credit for the remaining value of the car; this credit goes toward your next car. Although you'll make less money than in a private-party sale, the transfer of title is much simpler. END