I will have up to $3K as a down payment. I hope everything falls into place. How does a private party sell work if I still have a loan on the car?
Well you pay off the outstanding balance of the old car loan. if the amount you sell the car is not enough to pay it off you must come up with the difference yourself, so the new owner can take true possession and have the vehicle titled and registered in their name.
You are responsible for the negative equity,
If you were trading the car at a dealership they would roll the negative into the new deal, but they will of course only give you wholesale rates for your car.
Thank you very much for all your help! I appreciate it! But I have just one last question. Does the process of paying off my loan and obtaining the title a one day process or do they mail me the title?
thats a your state, your financing company thing.
the Buyer will have to get a 30 day temp tag, and hopefully you will be able to get them the title quickly.
You will be better served to write a quasi contract stating that on payment you will get the title and deliver it to the buyer as quickly as possible, but within the 30 days and if you cannot the deal is off and monies will be refunded.
Ideally, scraping all the money together now, paying the car off and having the title on hand would be the best route.
That way you would have the title clear and the loan paid on your credit report