How to Sell a Car You Still Owe Money On in Alberta

You can sell a car you still owe money on. We buy financed cars all the time.

The one thing that has to happen is the lender's claim on the car, called a lien, gets cleared. Here's how.

What actually stops the sale in Alberta?

Your lender registers a lien against the car's VIN in Alberta's Personal Property Registry. A registry agent won't transfer the car while that lien is still there.

You can check it yourself. A VIN search at any registry agent costs about $10 and shows what's registered against the car.

Want the number for your own car? Get a free offer. It takes about a minute.

The province tells buyers to check for liens too, so a buyer who asks isn't being difficult.

How do you find out exactly what you owe?

Call your lender and ask for a payout letter, valid through the date you plan to sell. For a lease, ask for the buyout figure.

Don't go by the balance in your banking app. The payout figure is usually different.

What if you owe more than the car is worth?

That's called negative equity, and about three in ten of the sellers we deal with are in that spot. You cover the difference so the lien can come off, then the sale goes ahead as normal.

Your loan balance doesn't set the price. The price is what the car sells for, and no buyer will pay more when the same car is available elsewhere for less. More on negative equity.

How long does the lien release take?

The payout happens on the day. The lender's release takes longer. We've seen anywhere from one business day to ten, so plan for five to ten.

That's normal. The sale is done on the day, and the paperwork catches up after.

How do you clear the lien on the day?

It's usually one visit to your own bank:

1. 1. Get the payout letter

   in writing, valid through your sale date.

2. 2. Agree on a price knowing the payout.

   If the price is higher, you keep the difference. If it's lower, you cover the gap.

3. 3.Meet at a bank, not a driveway. The lender gets paid first.

4. 4. Pay off the loan.

   Either the buyer's draft pays it directly, or the money goes into your account and you pay it while everyone watches.

5. 5.Sign the bill of sale and hand over the keys. Your plate stays with you.
6. 6.Wait for the release. It comes on the lender's schedule.

What if you don't want to let the car go first?

That's fair. Your name is on the loan until the release comes through.

A seller in Lethbridge wanted to see his loan close before the car moved. We made the payout as a bill payment from his own account, at his branch, while he watched. It took from 1 pm to 6 pm and nobody rushed him.

Whether that works depends on your bank, but it's worth asking. If the payment itself worries you, read how bank drafts work.

How does DriveOffer handle a loan?

We pay your lender directly and pay you whatever is left over. You don't need to pay the loan off first.

If you owe more than the car is worth, we work out the shortfall with you before booking, not in your driveway. Getting an offer takes about a minute.