In today’s blog post, we will answer the following question: How do you sell a camper when you still owe on it? We will discuss what happens when you no longer can afford to pay the loan on your motorhome and what your options are.

How do you sell a camper when you still owe on it?

To put it simply, you cannot sell a camper when you still owe on it. The law doesn’t allow to sell a camper, RV or caravan with a lien against it. If you want to sell the motorhome because you no longer can afford to pay for the loan, you will first have to pay the outstanding amount.

If you still have a loan on the vehicle you want to trade in, you should take steps to carefully assess whether you should take on new debt for another vehicle before paying off the old one.

Find out how much you still owe on your current vehicle. Get the total payoff amount from your lender. This is the amount you will have to pay to pay off the entire existing loan, which may be different from the outstanding balance that appears on your statement or coupon book. This difference may be due to a prepayment charge or the way interest is calculated.

Investigate how much is the value of the vehicle you want to sell so that you can know if the amount you still owe on that vehicle is less than said value, make sure to evaluate during any negotiation that you are receiving a fair valuation of the vehicle you want to deliver, and that you can fully pay off the old loan.

Decide if you are going to pay off your existing loan in full now, if you are going to wait to pay off your old loan before borrowing for another vehicle, or if you are going to include the amount you still owe on the current vehicle in a new vehicle loan.

If you owe more on the current vehicle than it is worth, and you refinance the current loan balance by including it in the new loan, it could make your new vehicle loan turn out to be much more expensive than expected. The total cost of the loan will be higher because you will be borrowing more than the total price of the vehicle.

If you decide to refinance your current loan balance and include it in a new loan:

Find out which department of your current lender to contact to confirm that once the new loan is agreed upon, the old loan is paid off.
After about a week, use the contact information to find out if your old loan has been paid off.
If the loan has not been paid off, contact the lender. If, after making the necessary efforts, the loan has not been paid in full, consider filing a complaint with the Federal Trade Commission. You can also report your experience without filing a formal complaint. You can also contact your state attorney general.

If the amount to pay off your loan in full is more than the dealer is willing to pay you for the vehicle you want to trade-in, you will have to pay what you owe for the old vehicle, even if you trade it in.

Think carefully about whether it makes sense to go ahead with the new purchase because, in this circumstance, the new loan will include the amount you still owe on the old vehicle, plus the amount you are borrowing for your next vehicle. You need to be very vigilant and make sure you understand the total cost of the new loan, the monthly payments, as well as the term of the loan (in months), before accepting any deal.

What happens when you no longer can pay your RV loan

If you fall behind on your payments, a lender can repossess your vehicle. Your credit score will suffer, you may still owe a “bad debt” or balance on the vehicle loan, and you will also be responsible for the costs of the repossession.

To avoid embargo:

Contact your lender as soon as possible. Your lender may be willing to renegotiate an affordable payment plan, especially if you have made your payments on time in the past. If you do come to an agreement, put it in writing so that there are no disputes later.
Refinance. Maybe you can get a lower interest rate or space your payments longer. Generally, a loan with a longer-term means that you will pay more in interest. Compare offers.
Sell your vehicle. Find out how much you owe on the loan and then check the approximate market value of your vehicle. If you owe less than the value of the vehicle, you can sell it and use the profit to pay off the loan in full. Check your loan agreement to see if there are any prepayment penalties.

If you don’t pay, the lender can repossess the vehicle. In many states, as soon as you default on a vehicle, the lender has the right to repossess or repossess the vehicle without the need to warn you or obtain a court order.

Some states have laws that require notice before garnishment, telling you what payments you have not made and providing you with a short period of time in which you can make those payments to avoid garnishment.

The military has certain additional protections against seizure under the Military Aid Act for vehicle loans and leases obtained prior to entering military service.

The lender cannot “break the peace” during the garnishment. Under state law, a lender cannot repossess a vehicle unless he can do so without breaking the peace. The definition of “breaking the peace” varies depending on the laws of your state.

It typically includes things like the threat or use of physical force, removing a vehicle from a closed garage without permission, or continuing with the embargo after you have resisted or refused to surrender the vehicle.

If the lender breaks the peace, contact the authorities. Said breach of the peace could also be used as a basis to claim damages or to file a response that allows you to reduce the amount that you finally owe after the sale of the vehicle.

Seizure methods: In addition to physically taking the vehicle away, some lenders may use an interrupt start device (SID) in lieu of repossession, or to facilitate repossession. A SID is a device that allows a lender or lessor to remotely disable a vehicle’s starting system if a borrower/lessee falls behind in payments or stops paying.

Deactivation can be temporary, until payment is made, or it can be done to facilitate garnishment. SID rules vary from state to state, so ask your lender, before signing the contract, if your vehicle is equipped with a SID.

If so, ask how this device works; for example, will they give you a warning before disabling the boot system? Is there a way to start the vehicle again in an emergency?

The bottom line

By law, it is not legal to sell a camper when you still owe on it. Your options are not looking too good: you still have to pay the outstanding amount if you want the title transferred. How to pay? One option is to ask for the money from a private buyer, to use personal resources or to trade in your vehicle.

You may have other rights and obligations under the laws of your state. For more information on the laws in your state, contact your state attorney general, your state consumer protection office, a private attorney, or your local legal services office.

If you have further questions or comments on the content, please let us know.

FAQ on How do you sell a camper when you still owe on it?

What is an RV short sale?

An RV short sale is an owner’s option to avoid foreclosure when he or she can no longer pay the mortgage on the RV. In a short sale, a service technician allows the borrower to sell the property at its current value, even if the amount of the sale is less than the total amount owed on the mortgage.

How much does an RV cost?

The costs of an RV depend on whether they are pre-owned, new, large, luxurious, simple, etc. However, an estimate (from a used one to a new luxury one) is between $ 15,000 USD to $ 100,000 USD.

How to sell an RV for the most money?

To sell an RV for the most money you need to research the current RV market and determine what your model is worth. Once you have determined the fair market value for your RV, you will be in a better position to get the most money for it.

References

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How do you sell a camper when you still owe on it?