The bottom line: Several major car buying companies handle your auto loan payoff when you sell to them. Five buy your car directly and pay your lender themselves: Carvana, CarMax, AutoNation, ALGO and Driveo’s local partner dealers.
CarGurus, KBB Instant Cash Offer and TrueCar are dealer platforms that connect you with a local dealer who handles the payoff. With CarGurus, the process and timeline depend on which dealer you end up with. With KBB, the payoff typically takes 30 to 45 business days after you hand over the car. TrueCar’s terms set one payoff process for all its dealers.
ALGO is the only one that charges for the loan itself, adding a $25 fee on top of its standard $125 admin fee. Carvana can charge for pickup, a fee of a different kind.
Closing the sale can take a day, but getting your lender paid and the lien released takes longer, and only that ends the loan. Keep making your loan payments until you have written confirmation the loan is paid off.
Before you decide, compare offers from multiple services with Sell Car Advisor to make sure you’re getting the best deal on your financed car.
A newer car, sold online
Instant offer, drop-off or pickup
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Offer amount 35% 5/5
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Process ease 20% 5/5
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Offer validity 15% 4/5
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Pickup / drop-off 15% 4/5
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Payment speed 15% 4/5
How it works and what it costs
How you sell
- Offer online, then drop the car off or book a pickup
- Pays your lender from the offer, and you get the rest
- Paid by check, direct deposit or credit toward a car
Cost to you
- Drop-off at a Carvana location is free
- Pickup fee up to $600 in our tests, shown when booking
Watch out for
- Keep paying the loan until Carvana pays it off
- If you owe more than the offer, you pay the gap
Comparing dealer offers
Dealer offers
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Offer amount 35% 4/5
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Process ease 20% 3/5
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Offer validity 15% 3/5
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Pickup / drop-off 15% 4/5
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Payment speed 15% 4/5
How it works and what it costs
How you sell
- Local dealers make offers on your car
- Drive it to the dealer whose offer you take
- That dealer guides you through the loan payoff
Cost to you
- Free to get and take an offer
- Your drive to the dealer you choose
Watch out for
- Payoff process and timing vary by dealer
- The offer can change after the dealer's inspection
A large chain with home pickup
Online offer, store or pickup
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Offer amount 35% 3/5
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Process ease 20% 3/5
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Offer validity 15% 4/5
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Pickup / drop-off 15% 4/5
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Payment speed 15% 2/5
How it works and what it costs
How you sell
- Firm offer online, good for 7 days
- Take it to a store, or book a home pickup
- Contacts your lender to arrange the payoff
Cost to you
- A home pickup can carry a fee
Watch out for
- Paid by bank draft, so ask your bank when it clears
- Keep paying the loan until the lender confirms
Loan payoffs and lease buyouts
Online offer, drop-off at a store
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Offer amount 35% 3/5
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Process ease 20% 2/5
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Offer validity 15% 2/5
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Pickup / drop-off 15% 1/5
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Payment speed 15% 4/5
How it works and what it costs
How you sell
- Offer online, then an inspection at a store
- Takes the payoff from the offer and sends it to your lender
- Paid on the spot, usually by check or Zelle
Cost to you
- No fee named for selling or the payoff
- Your drive to the store, as there's no pickup
Watch out for
- The offer can change after the store's inspection
- If you owe more than the offer, you pay the rest
An offer from a local dealer
Dealer offer
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Offer amount 35% 3/5
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Process ease 20% 2/5
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Offer validity 15% 4/5
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Pickup / drop-off 15% 1/5
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Payment speed 15% 3/5
How it works and what it costs
How you sell
- Offer online, redeemed at a dealer that takes part
- Good for 7 days at those dealers
- The dealer settles the loan out of the offer
Cost to you
- No fee to get or redeem the offer
Watch out for
- With a loan, your check can take 30 to 45 business days
- The offer can change after the dealer's inspection
Trading in while buying a new car
Dealer offer, drop-off
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Offer amount 35% 3/5
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Process ease 20% 2/5
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Offer validity 15% 3/5
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Pickup / drop-off 15% 1/5
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Payment speed 15% 3/5
How it works and what it costs
How you sell
- Offer online from a dealer in its network
- Take the car to the dealer within three days
- The dealer settles the loan from the offer
Cost to you
- No fee to use the service
- Your drive to the dealer's drop-off
Watch out for
- With a loan, your equity check can take 10 to 14 days
- The dealer can lower the offer or refuse the car
Selling from home
Online offer, home pickup
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Offer amount 35% 4/5
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Process ease 20% 4/5
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Offer validity 15% 3/5
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Pickup / drop-off 15% 4/5
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Payment speed 15% 3/5
How it works and what it costs
How you sell
- Online estimate, then a condition check by phone or chat
- Sends the payoff to your lender
- Pickup and payment by check, typically in 3 to 5 business days
Cost to you
- A $125 fee comes out of the offer
- Another $25 with a loan or lease
- Free pickup, with nothing paid out of pocket
Watch out for
- Offer is guaranteed only on the day it's made
- The estimate can change after the condition check
More time to decide
Quote online, sale at a location
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Offer amount 35% 5/5
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Process ease 20% 3/5
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Offer validity 15% 5/5
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Pickup / drop-off 15% 1/5
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Payment speed 15% 4/5
How it works and what it costs
How you sell
- Quote online, valid for a month
- Inspection and sale at a local drop-off location
- Pays your lender, and your equity often the same day
Cost to you
- No fee for the service, but travel is yours
- Any lender fees come off the offer
Watch out for
- Locations in 13 states, so you may need to drive
- If you owe more than the offer, pay it at the sale
Automated assistant: general info, not legal advice
Answers come from our state paperwork data and published guides. Confirm anything binding with your state DMV.
Compare Instant Offers
Car Buying Companies That Handle Loan Payoffs
The five that buy directly will take the car on its own, with nothing to sell you in return. The three platforms pass your details to a local dealership, and a dealership offer usually comes attached to a car it would like you to drive away in.
The loan itself takes less off than most faults do. In our own offer data on cars of every age, matched for age and mileage, buyers offer about 5% less for a car with a loan still on it than for one owned outright.
What a loan also costs you is how many buyers will take it on. Put an older car with a loan outstanding to up to three buyers at once and 24% of the time only one comes back, where the figure for cars generally is 7%.
That is the reason to start with a company that settles lenders as a matter of routine, rather than with whoever happens to be nearest.
Cars that got only one offer 1,069 cars 10 years and older, each put to up to three buyersShow the numbers
Condition Share with one offer Offers Starts and drives 5% 737 All cars 7% 1,069 Body damage 7% 135 Does not start 12% 213 Sitting at a mechanic 12% 77 Catalytic converter missing 17% 42 Loan outstanding 24% 38 
Carvana
Carvana buys newer running cars, with pickup in some areas
- Accepts cars with active loans
- Trade-in can save on sales tax
- License plate starts the quote
- Direct deposit option available
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Offer amount 35% 5/5
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Process ease 20% 5/5
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Offer validity 15% 4/5
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Pickup / drop-off 15% 4/5
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Payment speed 15% 4/5
Carvana offers a fully online car-selling experience with home pickup service in most major US cities.
Carvana pays the lender out of the offer, and any equity left over comes to you. This can add a few days to the paperwork.
An offer is good for seven days from when Carvana makes it. The final price can change if the inspection at pickup turns up something you didn’t mention online.
Carvana collects the car, sometimes for a pickup fee that you see before you book; in our own test offers it ran from $0 to $600. Apart from this fee and CarMax’s home pickup fee, every seller fee on this page is ALGO’s. Dropping the car at a Carvana vending machine is free if one is near you.
Payment is your choice of a check, a direct deposit, or credit against your next car.
CarMax
CarMax inspects and buys your car at 250+ stores
- Buys your car even if you don't buy one there
- Offer holds seven days and is not negotiable
- At-home pickup, though not everywhere and a fee may apply
- Quote in about 2 minutes online
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Offer amount 35% 3/5
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Process ease 20% 3/5
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Offer validity 15% 4/5
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Pickup / drop-off 15% 4/5
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Payment speed 15% 2/5
CarMax handles loan payoffs for financed vehicles, but the payoff is slow.
Some sellers waited three to seven weeks for the payoff to reach their lender. Keep making your regular payments during that time to avoid any late fees or negative marks on your credit.
CarMax pays with a bank draft, and your own bank decides how long it holds a draft that size before the money is yours to spend. Which payment methods clear fastest is worth reading before you agree to one.
Its offers are valid for 7 days, and it buys your car even if you don’t buy one from it. Most CarMax locations can collect the car from your home, though distance limits and a fee may apply.
AutoNation
AutoNation's 250+ dealerships buy cars outright or as trade-ins
- Sell at any of 250+ locations
- Offer good for 7 days or 500 miles
- Compare offers across nearby stores
- Buys economy to luxury vehicles
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Offer amount 35% 3/5
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Process ease 20% 2/5
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Offer validity 15% 2/5
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Pickup / drop-off 15% 1/5
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Payment speed 15% 4/5
AutoNation pays off your loan when you sell at any of its 250+ dealerships across the country.
It sends the payoff amount to your lender directly, though processing times vary by location. Any money left for you is paid on the spot, by check or Zelle.
AutoNation calculates the payoff amount and deducts it from your offer. If you have positive equity, you receive the difference.
It also handles lease buyouts with approved leasing companies.
CarGurus
CarGurus compares instant offers from local dealers side by side
- Offers compared side by side
- Star ratings for each dealer
- Handles your outstanding loans
- Dealer pays by check or transfer
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Offer amount 35% 4/5
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Process ease 20% 3/5
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Offer validity 15% 3/5
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Pickup / drop-off 15% 4/5
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Payment speed 15% 4/5
CarGurus doesn’t buy your car directly. It’s a dealer marketplace that sends your information to dealers in its network, and one of them makes the offer and handles the loan payoff.
The platform lets you compare multiple dealer offers, which can give you more options than going to a single buyer.
Because you’re dealing with individual dealers, the payoff process and timeline vary depending on which dealer you choose.
KBB Instant Cash Offer
Kelley Blue Book has guided car values since 1926
- Detailed condition questions
- Quote stays good for seven days
- Car values published since 1926
- Wide dealer network takes part
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Offer amount 35% 3/5
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Process ease 20% 2/5
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Offer validity 15% 4/5
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Pickup / drop-off 15% 1/5
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Payment speed 15% 3/5
KBB’s Instant Cash Offer doesn’t buy your car directly. It generates an offer that you redeem at a participating local dealer. That dealer handles the loan payoff, not KBB itself.
The participating dealer handles the necessary paperwork to pay off your loan and any related fees. Any remaining equity is yours to keep or put toward another vehicle.
Bring your lienholder information to the appointment. Offers are valid for 7 days and can be redeemed during business hours at participating dealers, pending inspection.
TrueCar
With TrueCar you get an instant offer and drop off at a local location
- See an estimated value in minutes
- Price tools show recent comps
- Walk away with a check in hand
- Offer is good for three days
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Offer amount 35% 3/5
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Process ease 20% 2/5
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Offer validity 15% 3/5
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Pickup / drop-off 15% 1/5
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Payment speed 15% 3/5
TrueCar doesn’t buy your car directly. It connects you with certified dealers in its network. A dealer handles the payoff and sets the final offer.
TrueCar works best if you’re trading in while buying a new car. Dealers subtract your trade-in value from the new car price, which can serve as your down payment.
If you owe more than the dealer offers for your car (negative equity), the dealer adds that amount to your new car loan. If you have positive equity or own your car outright, that amount reduces how much you need to borrow.
ALGO
Algo checks your car by phone or chat and collects it from your home
- Condition check by phone call or chat
- Picks up from your home within days
- Handles loan payoff paperwork
- A $125 admin fee comes off the offer, $150 with a loan
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Offer amount 35% 4/5
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Process ease 20% 4/5
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Offer validity 15% 3/5
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Pickup / drop-off 15% 4/5
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Payment speed 15% 3/5
ALGO is a car buying service that handles everything remotely. You skip the dealership entirely.
It checks your car’s condition on a short phone call or chat, then arranges free pickup at your home. The whole process usually takes 3 to 5 business days from start to finish.
ALGO charges a $125 admin fee plus an extra $25 if your car has a loan. Payment is a company check handed to you at pickup. ALGO names 18 states and Washington, DC in its region list, none of them Alaska or Hawaii.
Its online quotes are estimates that can change after the inspection. It has a 4.3/5 on Trustpilot based on 1,940 reviews.
Driveo
Driveo buys at its drop-off locations and pays at the visit
- Quote valid for a month
- Drive the car to a drop-off location
- Paid at the visit
- Free local ride after the sale
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Offer amount 35% 5/5
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Process ease 20% 3/5
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Offer validity 15% 5/5
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Pickup / drop-off 15% 1/5
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Payment speed 15% 4/5
Driveo handles loan payoffs at no extra charge, and its dealer pays your lender directly. Any fee your lender adds to the payoff can come out of what you’re paid, though.
Its quotes are valid for 30 days, at full price for about the first 10 days and about 3% less after that. Inspections at its locations take about 30 minutes, and most sales finish the same day.
Driveo has 29 locations in 13 states, so you may need to travel to one.
Whether the trip pays is a question only your own two or three quotes can answer, and its 30-day quote gives you the time to get them.
Which Company Should You Use?
The right choice depends on what matters most to you: speed, price, convenience, or flexibility.
| Your Situation | Best Option | Why |
|---|---|---|
| Want home pickup, newer car | Carvana | Fully online, home pickup in most cities, handles loan payoff directly |
| Want home pickup, almost any car | ALGO | 18 states and Washington, DC on its list, fully remote, handles loan payoff (extra $25 fee applies) |
| Willing to drive to a location | Driveo | No fees, a 30-day quote and same-day payment, if you can reach a location |
| Want a large chain with many locations | CarMax or AutoNation | Hundreds of locations each; an established process; CarMax also offers at-home pickup |
| Trading in while buying a new car | KBB Instant Cash Offer or TrueCar | Both are dealer-focused and work well when you’re rolling a trade-in into a new purchase |
| Want to compare multiple dealer offers | CarGurus | Sends your car to multiple dealers so you can pick the best offer |
| Need the most time to decide | Driveo | 30-day quote validity; most others expire in 7 days |
How Does the Loan Payoff Process Work?
Step 1 – Gather Required Documentation
Before selling your financed car, collect the paperwork. Ask your lender for a payoff letter, which gives the exact amount that settles the loan on a stated date, interest included, and says how long that figure holds.
You will not have the title. Your lender releases the lien electronically in 22 states, and in the rest it signs the paper title or sends a release letter once it is paid.
Also grab your current registration, a valid driver’s license, and all keys and key fobs. If multiple people are on the title, everyone needs to be present with a valid photo ID.
Step 2 – Get Multiple Quotes and Compare
Don’t take the first offer you get. Two or three quotes is enough to see the shape of the market, and each company prices differently.
On the older cars we can measure, the gap between the best and the worst same-day offer on one car runs to a median of $314, and a quarter of cars saw a gap of $823 or more.
Pay attention to how long each quote is valid. Most last 7 to 30 days depending on the company, and that window is for organizing your paperwork, not for waiting.
Sitting on a quote has a price of its own. Ask the same buyer again a month or more later and 59% of older cars come back with a smaller number, down a median of $40.
What asking again later cost 109 cars 10 years and older, each quoted twice by the same buyer · Time between the two offersShow the numbers
Gap between offers Typical change in the offer Offers 1 to 3 months $0 40 3 to 6 months -$20 21 6 to 12 months -$135 17 More than a year -$160 31
Step 3 – Company Verification Process
Once you accept an offer, the buying company contacts your lender to verify the exact payoff amount. This step matters because payoff amounts change daily as interest adds up.
Different lenders have different procedures for sharing payoff info with third parties. Some companies ask you for extra authorization before they can discuss the loan details with your lender.
Step 4 – Direct Lender Payment
The car buying company pays your lender directly once the transaction is final. How long the payoff itself takes is set by the company and your lender between them.
Keep making your regular loan payments during this period to avoid late fees. The buying company should confirm when it has sent payment, but final processing depends on your lender’s timeline.
Step 5 – Final Settlement and Confirmation
If you have positive equity (the offer is more than you owe), you get the difference through your chosen payment method. That could be a check, direct deposit, or credit toward another vehicle.
If you have negative equity (you owe more than the offer), you’ll need to pay the difference before the sale can finish. Most companies require a cashier’s check or certified funds for this.
Always get written confirmation that your loan is fully paid off. Ask for documentation showing the lien has been released before you consider the transaction done.
Understanding Positive vs. Negative Equity
Equity is the difference between what a buyer will offer you and what your lender says it takes to clear the loan. If the offer is bigger, the difference comes to you; if the payoff is bigger, the difference has to come from somewhere.
You would not be alone in the second case. Edmunds puts the share of trade-ins carrying negative equity at 29.6%, on cars averaging 4.0 years old.
What the arithmetic means for your next car is the financed-car guide’s subject. What matters here is which of the eight will complete a sale when the payoff is the bigger number.
When selling a financed car, your equity position determines whether you’ll receive money or need to pay extra to close the deal.
Positive equity means the offer is more than your loan balance. Negative equity (also called being “upside-down”) means you owe more than the offer.
The five direct buyers (Carvana, CarMax, AutoNation, ALGO, and Driveo) can handle both scenarios. For CarGurus, it depends on the individual dealer. KBB and TrueCar dealers handle both: they pay off the loan and send you a check for any equity left over, which at TrueCar takes about 10 to 14 days. But if you have negative equity, you’ll need to cover the difference between the sale price and the payoff amount before the transaction can be completed.
That extra payment must typically be made via cashier’s check. Get written confirmation that the loan is fully satisfied before handing over the keys.
What’s the Best Mileage to Buy Out and Sell a Leased Car?
The best mileage to buy out and sell a leased car is well under your allowance or well over it. Your contract fixed the buyout price, called the residual value, when you signed. The miles you drive don’t change that price, but they do change what buyers offer for the car.
If you’re well under your allowance, buyers price the car on its low miles, while the buyout price assumes you’d drive the full allowance, so the difference is yours when you sell. Unless your contract credits unused miles, handing the car back returns nothing for them.
If you’re well over, handing the car back means paying your contract’s charge for every extra mile, plus its disposition fee and any excess-wear charges. Those are charges for returning the car, so buying it out avoids them. Say your contract charges 25 cents a mile and you’re 4,000 miles over: returning the car costs $1,000 before the disposition fee, so a buyout and sale that loses less than that still leaves you ahead.
At any mileage, add up the buyout price, the contract’s purchase option fee and any sales tax your state charges on the purchase, then set the total against the best offer for the car. To see where your residual stands, divide it by the car’s sticker price: by Edmunds’ count, a three-year-old car keeps about 66% of its sticker price on average, so the further a three-year residual sits below that share, the likelier buyers are to offer more than the buyout costs.
Whether a buyer can pay off the lease for you depends on who holds it. Carvana does it only for the 13 leasing companies on its approved list, and only with more than 30 days left on the lease. CarMax does it for any leasing company except those on its own excluded list, which includes Ally, Ford Credit, GM Financial and Honda Financial. Toyota Financial Services is on both lists, so a Toyota lease can go to Carvana but not to CarMax.
When a buyer pays off the lease, it works from a payoff quote the leasing company gives it, which isn’t always your contract’s buyout price, so set the buyer’s offer against that quote. Where no buyer can take the lease, or it has 30 days or fewer left, you buy the car out yourself and sell it once the title is in your name. Carvana needs that title, with no lien on it; the leasing company’s title signed over to you isn’t enough.
Get offers before you pay for the buyout, so you know the sale covers it, then get them again once the title arrives, because they expire.
Compare instant offers before you accept one
Compare instant offers before you accept one
FAQ
Can I sell my car if I’m behind on payments?
Most of the eight will not complete a sale on a delinquent loan, and a lender that has started recovery will not release the lien to anyone but itself.
Talk to your lender before you talk to a buyer. If they will accept a payoff, get it in writing with the figure and the date, and the sale can go ahead like any other.
Will a dealership pay off my loan no matter how much I owe?
It will settle the loan, yes. Paying it off is not the same as absorbing it.
When the payoff is bigger than the offer, the difference does not disappear. A dealership rolls it into the loan on your next car, and a buyer with nothing to sell you asks you to cover it before the sale closes. Either way you pay it.
The advertising is about who writes the check to your lender, not about who carries the gap.
What if my lender is a small local bank or credit union?
It usually works, and it usually takes longer. A large lender has a payoff department that does nothing else; a small one may handle it by mail between branches.
Ask your lender how they take a payoff from a third party, and whether they want a form of their own. Passing that answer to the buying company up front is what keeps the sale from stalling.
Is there a service that handles the payoff if I sell privately?
Yes. If you already have a private buyer and only need someone to stand between them and your lender, KeySavvy handles the payment and the lien payoff for a private sale.
None of the eight buyers above will do that. They buy the car; they do not close somebody else’s deal.
Does WeBuyAnyCar pay off my loan?
It buys cars with finance on them, and like the eight above it pays your lender before it pays you.
The question to ask any buyer not on this page is the same one: do you send the payoff to my lender directly, and what happens if my payoff is bigger than your offer? An answer that is vague on either half is the answer.
Are there tax implications when a company pays off my loan?
Selling a car you use privately is not usually a taxable event, because almost nobody sells one for more than they paid.
A loan being paid off out of the sale does not change that: the money went to your lender on your behalf, not to you as income. A business vehicle is a different question, and one for whoever does your return.
Article Update History
Now covers when buying out a lease to sell it pays, with residual values from Edmunds and each buyer's leasing-company rules from its own help pages.
Each company's loan payoff process, fees and pickup availability now reflect current terms.
Originally posted and shared with our readers.
Sources
Cars that got only one offer, Junk Car Value Statistics
"1,069 cars 10 years and older, each put to up to three buyers" Accessed Oct. 16, 2026
What asking again later cost, Junk Car Value Statistics
"109 cars 10 years and older, each quoted twice by the same buyer" Accessed Oct. 16, 2026
Junk Car Value Statistics, Sell Car Advisor
"On this page: 2 figures from 17,628 instant cash offers, and 5 figures from same-day quotes by several buyers" Accessed Oct. 19, 2026
"29.6%, underwater trade-ins; 4.0 years, age of a car traded in underwater; 66%, what a three-year-old car keeps of its sticker price; $944, monthly payment for an underwater borrower" Accessed Sep. 21, 2026
"1 in 3, new car loans longer than six years" Accessed Sep. 11, 2026
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