How To Sell My Car With A Loan

 How To Sell My Car With A Loan - Generally speaking, a car loan is a long-term commitment that can last up to five years – and sometimes more. So, what happens if you find yourself needing to sell your car before you pay it off?

It is not unusual for circumstances to change, so whatever reason you need to unload your car before the end of the loan period, it can be easy to know that it is possible. There may be a few more steps in the process.

How To Sell My Car With A Loan

The reason is that if you still owe money on your car, then it is not yours.

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If your car loan is related to the car itself - which it probably is, especially if it was bought new - then the car is classified as damaged. Buying a vehicle can be seen as a big risk for the buyer, because if you fail to pay the loan after you sell the car to them, the buyer can repossess their car.

On the other hand, if you finance your car with an unsecured car loan, the responsibility to pay will be on you.

Either way, it is important to be honest with buyers when selling a car that is under finance. Communicating how you plan to overcome any potential risks will give them the confidence to buy and reduce the chance of them losing interest.

That said, it is important for used car buyers to protect themselves by checking the Product Safety Register (PPSR) before buying a car, to see if there are any safety requirements registered on it.

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Selling a car for cash can be an easy process if you know the steps you need to take. Consider the following to get you on your way:

Once you've decided that you want to sell your car, the first step you should take is to contact your lender and tell them you plan to sell. Then you can discuss what options you have when it comes to paying off past dues. Be sure to ask about early payments and exit fees and include these in your total amount, to ensure that you are not left in an unwanted financial situation after selling your car.

If you have enough money in savings to cover the qualified amount along with any possible down payment, you may be able to leave the payment before selling your car to remove the burden and/or simplify the process.

After you've negotiated with your lender, it's time to list your car for sale. Consider taking the opportunity to disclose your vehicle ownership status in the listing. If you withhold information and an interested buyer looks at the car up on the PPSR, they may think you are dishonest, and you may lose the sale.

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You may choose to wait until you receive an offer to let the buyer know that the car is subject to finance, and how you plan to pay for it. But again, this may lead the buyer to believe that you are being dishonest, and they may wonder if there are other details about the car that you have not disclosed.

If you have already discussed the condition of the car with the buyer and you are happy with their offer, you can go ahead with the payment plan.

If you plan to use the proceeds from the sale of the car to pay off the loan, you should be able to do so entirely at the bank where the loan is held. This way, the buyer can be there to witness the loan being paid off before the ownership is transferred into their name.

Remember, if you sell the car for less than the amount you were given on the loan, you will be responsible for meeting the shortfall before the sale is completed. On the other hand, if you sell the car for more, you should receive the excess after the outstanding amount is met.

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Once your loan is paid and the lien on the car is lifted (if required), the car can be transferred to the new owner's name. As the previous owner, you are responsible for submitting a notice of disposal within 14 days of the sale. The rest of the system is up to the new owner.

This article is more than two years old, it was updated on June 3, 2021. While it tries to update every important article regularly, the information in this area may not be as relevant as it used to be. Alternatively, please consider checking out the latest auto loan news.

This article was reviewed by Personal Finance Editor Mark Bristow prior to publication as part of the 'Fact Check Series'.

Georgia Brown is a Personal Finance Editor and reporter for , covering the financial landscape in Australia on loans, credit, mortgages and real estate, financial support, and sustainable finance, to name a few. Before entering the private finance industry, she worked as a reporter for Smart Property Investment, Real Estate Business, and REA's realestate.com.au, and these days her work can be seen in many publications, including Lifehacker and .How to Sell a Car for Money. Selling your car is usually no walk in the park. Selling a car that still has a loan on it adds a little more difficulty to the effort. However, this does not mean that it cannot be done.

How To Sell A Car With A Loan

Maybe your driving needs have changed and you don't need a car anymore. Maybe your financial situation has changed and you don't want a car. Maybe you want to trade for something bigger with more room for passengers and storage. Maybe you want something smaller and more fuel efficient. Whatever your reasons, you have options when it comes to selling a car that is still carrying a loan.

Yes, you can sell your loaned car, but if you plan to sell privately, you need to figure out how to pay off the remaining loan balance before transferring ownership. Or, you can work with a company that will take care of you.

You really have three options for where you can sell a car for money: a private sale, an online dealer, or a dealership.

Some people enjoy going through the steps of selling a car in secret. Doing the math, DIY sales, arranging repairs and touch-ups, meeting with buyers, and sitting through the test drive is worth the effort if they can get the best price for their old car. Some may consider expecting all this work and effort. However, the fact remains that it is the best way to increase your car's return rate; even when it comes to selling a car.

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However, finding a buyer to buy a car with a loan still on it will be a challenge. Most buyers are looking for a safe buying experience in the private market and usually don't want the hassles of buying a car on finance. A buyer usually wants a clean title, which means you'll need to find a way to clear the lien before you transfer the title. Remember, the lender claims ownership of the vehicle while the loan is outstanding, so the lender will need to be paid in full to release its lien.

Another drawback to a private sale is that it eliminates the convenience of trading in your car. And this may be your last reason for wanting to sell a car for cash - to upgrade your vehicle. This brings us to online retailers and retailers.

Online dealers appear as a legitimate option when you want to sell your car quickly and at a good price. These companies are essentially retailers without physical showrooms; everything happens 100% online.

Online dealers offer incredible convenience with all the techniques used to manage the purchase of a financed vehicle, including the business environment. An online dealer will make an offer on your car based on a few details you provide online. If you have a bad car loan, the dealer can work with your lender to pay off the balance and send you the difference.

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But the best thing: an online seller can give you more money than a traditional dealer. But how?

Many online dealers (like Canada Drives, or Carvana of the USA) operate nationally, buying thousands of cars from customers all over the country. With a digital-first presence, online sellers can cast a wider network in terms of market reach. So, the business model of an online retailer is buying at scale, which means you can skip the low-ball, nickel-and-dime tactics that you might expect with some traditional retailers.

Traditional dealerships don't generally look to buy cars from the public, but if you're in the market for a new car, many dealerships accept sales. Your dealer will evaluate your current vehicle and tell you what they think is right for you. If you accept their offer, that dollar amount will go toward the purchase price of your next car. Your dealer will know

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