Can You Sell a Car on Finance?
As life happens, unexpected circumstances often require us to sell our vehicles. Selling one with an auto loan may prove more complex; however, it is still achievable.
As soon as your loan has been paid off in full, notify the lender and get an agreed upon payoff amount in writing from them. After which, advertise the car for sale while also screening potential buyers.
It is possible to sell a car on finance
Most new cars and many second-hand vehicles are purchased using finance packages such as personal contract purchase. This means that although you are the registered keeper of the car, its ownership remains with the lender throughout your contract period; making it difficult to sell without first clearing off your loan balance.
Selling your car while still owing money is possible, but requires following some specific steps. Notify the lender of your plan to sell and obtain their payoff amount in writing; make sure the sale does not result in less money being received than its actual worth; ensure it sells at market price; etc.
Selling your car through a dealership will allow you to avoid legal complications, while making ownership transition smoother for both buyer and seller. When accepting payments from buyers it is wise to insist on cash or bank checks only; personal checks can bounce and become difficult to trace.
It is not a good idea to sell a car on finance
Before selling a vehicle while still owing money on it, it’s essential to understand its ownership is legally held by your lender until its paid off in full. If you sell without paying off its loan first, they could take legal action against you for doing so.
To prevent this from happening, always settle any outstanding finance before selling your car to another party. You can do this by contacting your bank or finance company and negotiating an agreed upon settlement figure for the car; once sold, use its proceeds to repay any loans and clear your title.
An alternative solution would be trading the car in at a dealership for ease of process. Dealerships are used to dealing with these transactions and should take care in handling all necessary paperwork for you – just be sure to do your own research first and ask about its worth based on its make, model year mileage condition etc.
It is illegal to sell a car on finance
Selling a vehicle while still paying back its financing agreement is illegal unless authorized by both dealer and lender, since you do not fully own its value until all payments have been completed. However, you can return it through voluntary termination or pursue debt solutions that could reduce some debt payments.
Your best option when selling your vehicle on finance through private sale is a private sale; however, this requires notifying your lender of the sale and getting their approval before advertising your car online and screening potential buyers.
Process can be both stressful and expensive, but it is possible if you take the necessary steps. For example, get a bill of sale that details its value and odometer reading as well as all steps taken during its sale process. Furthermore, document all steps taken during your sale.
It is not easy to sell a car on finance
Selling a vehicle when there is still an outstanding loan can be challenging, yet achievable. Although you will require extra work when selling one that still owes money, most lenders require payment off during or prior to sale for transfer of title and their exact procedure may differ depending on whether you’re selling to a dealer or private buyer.
Pay off any loans prior to selling the car – this will eliminate liens and make title transfer much simpler; plus it enables you to negotiate a better price since no interest will be accrued on it anymore. It may be hard saving up for this upfront, but it will pay dividends later.
