Having to sell a motorcycle isn’t necessarily the most pleasant experience, especially if you wanted to keep it but are forced to let it go. It’s a simple enough process, but there are a few factors that can make it a bit more complicated, such as if the motorcycle still has a lien on it that you’re still trying to pay off.
How do I sell a motorcycle with a lien? If you are selling a motorcycle with a lien on it, you and the buyer will need to go to your financial institution together to complete the transaction. The seller will pay the bank your negotiated price, you will get a check from the bank of any difference in the price paid, and the bank will release the title to the seller.
When it comes down to it, selling a motorcycle with a lien doesn’t have to be considered a complication at all. I have sold several cars and motorcycles that still had liens on them and was able to complete the process with no issues. This is what I’ve learned.
Selling A Motorcycle With A Lien
Most people assume that in order to sell a motorcycle, you will need to have possession of the clean title in order to get any interest from buyers. This actually isn’t the case. It’s completely possible to legally and safely sell your motorcycle that still has a lien on it.
To be clear, a lien and a loan aren’t necessarily the same thing. A loan means you have borrowed money and owe a debt, whereas a lien means a financial institution has collateral against you (the motorcycle) until the debt is paid.
It’s a good idea to call your bank first to inform them of your intention to sell the motorcycle and see exactly what they need in order for the transaction to run smoothly. But I can tell you in general what to expect when doing something like this.
First, you need to be aware of how much you still owe on the motorcycle. Payment stubs may show an amount owed, but it’s usually not the exact amount. You need to contact your bank and ask them directly exactly how much you need to pay off the motorcycle. This will give you a good reference of how much you will be able to pocket once it’s sold.
Next, you’ll need to figure out the worth of your motorcycle and get it up for sale. If you’ve never sold a motorcycle before, you need to expect that potential buyers will ty to negotiate the price. It’s okay to list the motorcycle for a little more than you’re expecting to get out of it because people feel like they’re getting a deal if you go down on the price a little bit.
You’ll also need to make sure you have insurance on your motorcycle during the selling process. Most potential buyers are going to want to take it for a test ride so they know exactly what they’re getting in to. Having insurance will be vital during this process.
Once you have a buyer and have agreed on a price, you and the buyer will both need to go to your lending bank together and complete the transaction. The buyer can either pay in cash or with a registered check. Even if they are using another financial institution that loaned them money, they should still be able to hand over a check from that bank. Inform the bank that you are selling the motorcycle and are paying off the loan with the money the seller is providing.
If there is any money left over after paying off the loan, the bank will either give you cash or a check, or you can simply put the amount in your account there. Some banks will be able to sign the title over to the new buyer that same day while other banks will require several weeks before they can mail the title to the new buyer.
Complications That May Arise
The simplicity of selling a motorcycle with a current lien on it can hold a few complications or road blocks. I’ve run into most of these complications myself and can tell you how to get around them.
The first complication you may run into is that you owe more to the bank than what the motorcycle is worth. This is the most common issue people will have while selling a motorcycle with a lien on it. Unfortunately, this is one of the consequences of depreciation and there is no way to negotiate with the bank about how much you owe. You signed several documents promising you’d pay off the loan.
There are two ways to go about doing this. The first is talking with your bank and seeing if you can get a personal loan. Personal loans can have high interest rates though, unless you have some sort of collateral such as a savings or checking account. These types of loans are a bit more lenient about what you can use the money for, so you can use the personal loan to pay the difference.
The second option you have is simply forking up the money to pay for the difference in what you owe. This is often hard for sellers because they are usually selling the motorcycle for financial reasons and coming up with the extra money to pay it off almost seems impossible.
The second most common complication you may run into when selling a motorcycle with a lien is if the buyer is also financing the purchase of the bike. If this is your situation, don’t consider this a complication because it’s completely doable.
Once you have agreed on a price, you and the buyer will still need to go to your bank together and inform them of your intentions. The buyer will also need to have made arrangements with their bank before the purchase, such as applying for a loan in the first place. Your bank will then be able to contact the buyer’s bank and sign over the appropriate paperwork.
Your bank will also be able to tell you when it’s okay to let the seller take the motorcycle (usually it’s that same day). Most of the time (as I mentioned before), the buyer can usually just get a check from their bank and bring it with them to your bank.
How To Make Your Financed Motorcycle Marketable
When selling a financed motorcycle, you need to be as transparent as possible to the buyer. The last thing you want to do is negotiate and come to an agreement then drop the bomb saying it’s financed. That can turn away buyers real quick.
When you’re advertising your motorcycle for sale, always put in the description that you do not have the title and that you have it financed through a bank. This way you know any buyer that contacts you is aware of the financial situation and you don’t feel like you’re keeping any secrets.
A few additional tips: give your motorcycle a detailed clean. Take it to the car wash, shine it up, and make it look like it is brand new. A clean looking motorcycle will help buyers know that you’ve taken good care of it.
When posting it for sale on online platforms, make sure to have a detailed description about the motorcycle. Answer any questions you think buyers may have about the bike. Also post a lot of good pictures and even videos. I’ve seen first-hand this helps sell a motorcycle much more quickly.
You can click here to see my other article that discusses how to write an ad for a motorcycle that will make it sell quickly.
Selling A Motorcycle To A Dealership
Selling your motorcycle to a dealership isn’t necessarily out of the question if you still have a lien on the bike from another financial institution. Most dealers will still buy your motorcycle in such a situation. In fact, selling your motorcycle to a dealership is probably the easiest way to sell a motorcycle whether or not it’s already financed.
Dealerships are usually able to do all the paperwork for you. You may still need to go to your bank and sign a few papers, but you won’t have to deal with bringing in a seller with you and working with their schedule.
The downside to selling a motorcycle to a dealer is that they don’t pay you as much as you could get by selling it privately. If you sell it for less than you owe, you’ll need to come up with the difference and pay your bank. That difference will likely be bigger when selling your motorcycle to a dealership.
Conclusion
Selling a motorcycle with a lien shouldn’t have to be a complicated process. Helping the buyer be aware of the financial situation as well as calling your bank ahead of time will make the whole experience much easier.
With patience, diligence, and the right approach, you can sell your motorcycle with a lien and move forward confidently towards your next vehicle ownership chapter.
Related Question
What are some ways to pay off a motorcycle loan faster? The first and best way to pay off a motorcycle loan faster is paying more than the minimal payments each month. You can try doing bi-weekly payments, add an extra payment a month, and/or put any extra money you get towards the loan.