I assume this is totally up to the lienholder (mine being a credit union), but I thought I'd ask anyways, in case anyone has had experience with such an instance.

I owe $12,800. My car is worth $10k. If I sell it for $10k (or whatever), will my lienholder sign the car over to the new owner and allow me to continue making payments, without having to keep the title with them?

I may be purchasing another vehicle if this can be done and, if it'd make a better situation, I could give them the title to that car (this one is being purchased in cash).

Any ideas? I'll be calling them tomorrow.

 

If they consider you a good enough risk for a personal loan they might let you owe them the difference. They probably will ask you to provide other collateral in place of your car - furniture, boat, motorcycle, whatever else you might own.

Your best bet is to call them (or stop in) explain your situation to them and ask what they will and will not do.

 

I'm thinking that offering them to hold onto the title of my replacement vehicle would be the best collateral for them.

 

They won't give you the title to your present car today and hope you come in tomorrow with the title to your new car. AND, the new car has to be worth the amount of the loan on it and also the amount of loan outstanding on the car you want to sell. Again, talk to them is the best way to get an accurate answer.