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If you have a loan on the car from a bank your title will state that it has a Lien on it. (On lien recorded). In order to pass on the title to the next person you are responsible for clearing that lien.
An example:
If you owe 10 000 on the vehicle, and you get 8 000 dollars from a private party, the remaining 2 000 would be your responsibility to pay back, unless you work that out with the buyer. Most private party sales will want a clean title with no liens recorded, so you can expect any buyer to want you to have the lien removed.
If you are selling it to a dealership as part of a trade, the amount you owe - the negative equity - is rolled into the purchase price of the vehicle you are trading for.
so in the example above, if you are purchasing a 15 000 dollar vehicle with a trade in value on your vehicle of 8 000, the sale price will be 11 000 (Sale price - trade in + negative equity) that you would finance. In effect, the dealer then pays off your trade. Negative equity is how people get in trouble in a hurry.
There are various DMV forms that need to be filled out as well when selling via private party, including a tax form (the buyer still has to pay tax).
Hope that helps. Any corrections anyone wants to add go for it, but that is the gist of it. No one wants a title with a lien on it, becase that means, technically the bank or lienholder still owns the vehicle.
You may also find buyers willing to take over payments. That I cannot help you with and would only advise you to do that with family.
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