Selling a car with a loan on it in Florida: what you can do

You can't sell a car with a loan on it in a private sale in Florida. FLHSMV puts it plainly: a vehicle cannot be legally sold in a private sale if there is an existing lien, and the lien must be satisfied and reported to FLHSMV before the title can transfer. The exception is trading the car in at a licensed Florida dealership. Everything below follows from that one rule.

The rule and its exception

A lien is the lender's claim on the car, recorded against the title. Until the lender reports the lien satisfied, the title can't move to a new owner — which is why a private buyer can't simply hand you the money and drive off.

Trading in at a licensed Florida dealer is the route FLHSMV names for a car with an open loan. If you'd rather sell outright than trade, ask the dealer how they handle a car with a lien before you agree on a number.

Step one: get the payoff from your lender

Ask your lender for the payoff amount and the date it's good through. The balance on your last statement isn't the payoff; ask for the payoff by name. You'll need it to know where you stand, and the dealer will need it to close the deal.

Positive or negative equity

• Positive equity. The sale price or offer is higher than the payoff. The lender is paid in full and the rest is yours — as cash, or toward your next car.
• Negative equity. The payoff is higher than what the car brings. The gap has to be covered before the lien can be satisfied, because the title can't transfer with the lien open. Ask the dealer, in writing, how the gap would be handled in their offer. Don't assume.

There's no rule of thumb here. It's the payoff against the offer, on the day.

What happens to the title after payoff

Lienholders and FLHSMV exchange lien notices and lien satisfactions electronically. Once the lender reports the loan satisfied, the title remains electronic until someone requests a paper title.

• Selling privately afterwards? You'll need the paper title. An owner with no lien can convert online at the MyDMV Portal for $4.50; it arrives by mail in about 3–4 weeks.
• Trading in at a Florida dealer? You don't need a paper title beforehand.
• Financing the next car? The state charges $2 to record the new lien.

The rest of the paperwork

• Plate. In a Florida sale the plate stays with you, not the car. Transfer it to another vehicle or surrender it before you cancel the insurance; the other order risks a suspension and reinstatement fees.
• Notice of sale. In a private sale, you tell FLHSMV within 30 days using form HSMV 82050 or the notice on the back of the title. In a trade-in, the dealer files the notice you sign in section 7 of HSMV 82040, within 30 days. Sales to or by a licensed dealer are exempt from the seller's own notice (Fla. Stat. 319.22) — keep a copy of what you signed anyway.
• Export. If the car is leaving the country with a lien still recorded, U.S. Customs requires a letter from the lienholder on its letterhead, with the VIN, phone numbers, an original signature and the date, expressly allowing the export (19 CFR 192.2).

Selling or trading with Xuma

Xuma buys cars and takes trade-ins toward a car from us, with an offer the same day. Send the VIN and the condition on the sell-or-trade page, say that there's a loan on the car, and ask us how the payoff is handled before you accept. If you'd rather the car was sold on your behalf, consignment is the other route; the lien still has to be cleared before the title can move.

Rules change. Check the official source, or ask us, before you rely on a number here.