How to Sell a Boat That You Owe On

Your boat should look its best before you try to sell it.

Your boat should look its best before you try to sell it.

Selling a boat on which you still owe money is like selling a car under the same circumstances: You must receive enough from the buyer to pay off your existing loan; otherwise the buyer won't receive the title and you will be liable for the remaining balance. You don't have to pay off the loan prior to selling the boat, but be clear with your buyer so he knows he must wait for the bank to process the payment before issuing the title.

Call your lender or check online to find out the payoff on your boat's loan. Ask how long the payoff amount is valid; many are good for 30 days, meaning you may need to request another payoff amount if you don't sell your boat within that time frame. Ask the lender how long it takes to release the lien and mail the title once the loan is paid so you can share that information with your buyer.

Set a reasonable price for your boat. Find an estimated value using the NADA Marine Guide or American Boating Association pricing guide. Choose a price that is slightly higher than what you need to pay off your loan to allow you some room to negotiate with your buyer. Some people like to feel as if they've gotten a good deal by talking you down.

Advertise in your local paper, boat buying guides and online in free classified ads and online auction sites, many of which have special sections for cars, boats and other high-ticket items. Be flexible with your meeting times to accommodate potential buyers whenever possible. If you're going to be out of town for two weeks, wait until you get back to advertise the boat for sale.

Negotiate with potential buyers until you agree on a price with one of them. Request certified funds for the boat or have the funds wired from his bank to yours, meeting him at his bank if necessary to provide the necessary information. Give him a bill of sale to help him register the boat in his name.

Wire the money immediately to your lender or send it a check along with a written request to release the title. Call them to confirm receipt of the money so your lender can start the payoff process. Provide your lender with the buyer's mailing address so it can send the title directly to him.


  • If you think buyers may be uncomfortable waiting for the title, try to get a personal loan and use it to pay off the balance on the boat. Once you sell the boat, you can provide the title with the bill of sale, then use the money to pay off your personal loan.
  • Boat brokers may help you sell your boat, even if you owe money on it. They take a commission off the sale, so make sure the boat is worth more than what you owe so you can afford to pay a broker.
  • Repair any damage or non-working items on your boat prior to putting it up for sale. Clean the boat well and remove all your personal belongings. You want your buyer to visualize himself spending time on the boat with his own belongings.

About the Author

Based outside Atlanta, Ga., Shala Munroe has been writing and copy editing since 1995. Beginning her career at newspapers such as the "Marietta Daily Journal" and the "Atlanta Business Chronicle," she most recently worked in communications and management for several nonprofit organizations before purchasing a flower shop in 2006. She earned a BA in communications from Jacksonville State University.

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