Junk car buyers can buy a car that is on lien, but the lien must be paid off and released before or during the sale. You cannot transfer a clear title until the lienholder removes their claim.
How selling a car with a lien works:
A lien means a lender (bank, credit union, or finance company) has a legal claim on the vehicle until you pay off the loan. The lienholder’s name appears on the title. To sell the car, you must satisfy the loan and obtain a lien release.
Options for selling a junk car with a lien:
- Pay off the loan first: Clear the balance with the lender, get the lien release, and obtain a clean title. Then sell to any buyer.
- Use the sale proceeds: If the junk car’s value covers the loan balance, some buyers will pay the lender directly, obtain the lien release, and give you any remaining amount.
- Pay the difference: If you owe more than the car is worth (negative equity), you must pay the gap between the sale price and loan balance out of pocket.
Most junk car buyers and junkyards work with vehicles that have liens, but the process takes longer. You will need to provide lender contact information, the payoff amount, and coordinate the title transfer. Some buyers handle this process for you. Others require you to clear the lien before they purchase.
Contact your lender for the current payoff amount before getting quotes from junk car buyers.