How to sell a car privately that you are still making payments on?

My wife wants to sell her car because we have a baby on the way and want to get something bigger. The dealerships are not giving us what it is worth for trade in (as they do with any trade in). For this reason we want to sell it private party but that is selling mortgaged property. We don't owe very much on it but I have been doing work on the house to get ready and have been paying cash for those improvements so I don't have enough on hand to pay off the car anymore. (I should have done this before ripping into the house!). How do you do it if the bank has the title and technically still owns it?

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