As a donor, it's understandable to feel concerned about donating a vehicle that still has an outstanding loan. Many people wonder if this is even possible and what steps are involved. The short answer is yes, you can donate your vehicle with a loan, but you must meet certain conditions before proceeding.
The primary requirement is that the title must be free and clear of any liens. This means either paying off the loan completely and obtaining a clean title or getting the lender's agreement to release the title at the time of sale, with proceeds going first towards paying off the loan. We cannot accept vehicles that have an active lien, so it's essential to ensure this is resolved before arranging for pickup.
How to make it happen
Contact Your Lender
Reach out to your bank or lender to discuss your intention to donate the vehicle. They will provide you with options for either paying off the loan or releasing the title at the time of sale.
Pay Off the Loan
If your vehicle is worth more than the amount owed, consider paying off the loan to obtain a clean title. You'll need a payoff letter from the lender, which can expedite the donation process.
Request Title Release at Sale
If you choose not to pay off the loan, ask your lender to agree in writing that they will release the title at the time of sale. This will typically require you to provide documentation that the sale proceeds will go directly to the lender for the outstanding balance.
Prepare Documentation
Gather any necessary documents, including the vehicle title (if available), payoff letter (if paid), and any lender agreements. Ensure everything is in order for the donation.
Schedule Pickup
Once the title is confirmed as free and clear, schedule a pickup time with Wheels of Change. Make sure to have all documentation ready for a smooth process.
Common gotchas
Unclear lien release terms
Tip: Always double-check the terms with your lender regarding the lien release. Miscommunication can delay the donation process significantly.
Incomplete paperwork
Tip: Ensure all required documents are complete and accurate. Missing or incorrect paperwork can lead to a refusal to accept the vehicle.
Payoff amount discrepancies
Tip: Be aware that the payoff amount can change due to interest and fees. Confirm the exact amount with your lender before proceeding.
If this path doesn't fit
If donating your vehicle isn't feasible due to the lien, consider selling the vehicle privately to pay off the loan first. Once you have a clean title, you can then approach Wheels of Change for a donation. Alternatively, you could explore refinancing options with your lender to potentially lower your payments or payoff amount.
Atlanta DMV specifics
In Georgia, you'll need to handle the lien release through your lender. Contact them to ensure they follow the proper DMV procedures for a lien release. Additionally, remember to surrender your license plates when transferring ownership of the vehicle to avoid any future liabilities.