How do I get rid of a car I owe money on?

How to Get Rid of a Car You Owe Money On

If you’re struggling with car payments, you’re not alone. Many people find themselves in a situation where they owe more on their car than it’s worth. This can make it difficult to sell the car or trade it in, but there are options available to help you get out from under the debt.

1. Sell the Car Privately

One option is to sell the car privately. This can be a good choice if you owe more on the car than it’s worth, as you may be able to sell it for enough to pay off the loan and have some money left over. To get the best price, it’s important to prepare the car for sale by cleaning it up and making any necessary repairs. You should also research the market value of similar cars to determine a fair price.

When selling the car privately, it’s important to be honest about the fact that you owe money on it. This information will be disclosed when a potential buyer runs a vehicle history report, so it’s best to be upfront about it. You’ll also need to provide the buyer with a bill of sale and a release of liability form, which will transfer ownership of the car and protect you from any future liabilities.

2. Trade in the Car

Another option is to trade in the car at a dealership. This can be a convenient choice, as the dealership will handle the sale of the car and take care of all the paperwork. However, it’s important to keep in mind that you may not get as much money for the car as you would if you sold it privately. This is because dealerships need to make a profit and will often offer you less than the market value of the car.

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If you decide to trade in the car, it’s important to do your research and find a dealership that will offer you a fair price. You should also be prepared to negotiate, as dealerships may try to lowball you. Be sure to bring along any documentation related to the car, such as service records and the title, to help establish its value.

3. Surrender the Car to the Lender

If you’re unable to sell or trade in the car, you may need to consider surrendering it to the lender. This is often referred to as a voluntary repossession, and it’s a way to get out from under the debt without damaging your credit any further. When you surrender the car, the lender will take possession of the vehicle and sell it to recoup as much of the loan as possible.

It’s important to keep in mind that surrendering the car will have a negative impact on your credit score, as it will be reported as a repossession. However, it may be a better option than continuing to make payments on a car that you can no longer afford. Before surrendering the car, it’s a good idea to talk to the lender and see if they can offer any alternative solutions, such as a loan modification or a payment plan.

4. File for Bankruptcy

In some cases, filing for bankruptcy may be the best option for getting rid of a car you owe money on. This is a drastic step and should only be considered as a last resort, as it will have a significant impact on your credit score. However, if you’re unable to make your car payments and are facing other financial difficulties, bankruptcy may be the best way to get a fresh start.

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When you file for bankruptcy, the court will appoint a trustee who will review your assets and liabilities. If the car is considered an asset, the trustee may sell it to pay off your creditors. If the car is worth less than what you owe, the debt may be discharged, which means you won’t be responsible for paying it back.

5. Consider a Car Loan Refinance

If you’re struggling with high car payments, you may be able to refinance your car loan to lower your monthly payments. This can be a good option if you have good credit and have made on-time payments on your current loan. By refinancing, you may be able to get a lower interest rate and extend the term of the loan, which can reduce your monthly payments and make it easier to keep up with the loan.

Before you refinance, it’s important to compare offers from multiple lenders to find the best deal. You should also consider the total cost of the loan, including the interest rate and any fees, to make sure that refinancing is the best choice for your situation.


Getting rid of a car you owe money on can be a challenging process, but there are options available to help you get out from under the debt. Whether you decide to sell the car privately, trade it in, surrender it to the lender, file for bankruptcy, or refinance the loan, it’s important to consider your financial situation and choose the option that’s best for you.

Remember, the most important thing is to take action and find a solution that will help you get back on track financially. With the right approach, you can get rid of the car and move forward with a fresh start.

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Author: whoiswh