There are many reasons why a person is forced to sell their motorcycle. Whatever the reason is, selling a motorcycle isn’t necessarily a fun experience especially if you still wanted to keep it.
There are several complications that can arise when selling which can leave you frustrated. One of those complications you may be wondering about is how to sell a motorcycle that still has a lien on it.
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 and complete the transaction there. 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 vehicles 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.
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 people who will try to negotiate on 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. See my article here for more information about having insurance when selling a motorcycle.
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. 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.
Most buyers are wary of handing over a registered check to a seller, but the fact that they get to hand the check over to the bank directly and witness the transaction themselves ensures them that they aren’t being scammed. In fact, some people prefer buying motorcycles from people who still have a lien on the motorcycle for this very reason.
Any financial institution that offers auto/motorcycle loans will require you to have insurance. If you don’t have insurance on your motorcycle, you’ll probably need to get it especially if you plan on having potential buyers test-ride it. You can click here to see a list of insurance companies and compare rates that fit you and your needs.
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 run into 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).
How To Make Your Financed Motorcycle Marketable
As I had mentioned before, you may be worried about finding potential buyers when your motorcycle still has a lien on it. Many people assume buyers don’t want to have to deal with banks.
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 pictures of it so you don’t leave people guessing which leads them to moving on to the next posting.
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. The difference will likely be bigger when selling your motorcycle to a dealership.
Can a motorcycle be repossessed? It is entirely possible for a motorcycle to be repossessed if you used a loan from a bank or financial institution to purchase the motorcycle and begin to miss payments. The bank is entitled to repossess it because they technically have the rights over the title. See my article here for more information.
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.