
Can You Sell a Car on Finance?
Monday, 23 December 2024
Selling a car is very easy on different online platforms and physically, but when the same car is on Finance, it may become a different experience. Car finance and ownership rules sometimes become very hectic when selling the car to get another or just offloading to get a handsome amount of money. Don’t worry! In this blog, we’ll discuss whether it’s possible to sell a car on finance, how to do it, and the key things you need to consider.
Understanding Car Finance and Ownership
When you buy a car on a finance basis, you don’t have the power of attorney to sell it without the permission of the car finance company, as the car technically belongs to the finance company until you’ve fully repaid the car loans. One simple solution is to pay all the remaining balance related to the car and get full ownership. Then you will be set free to sell it in a minute.
Why does this matter?
When you need to finance a car, you must sign an agreement with the finance company. According to this, if you violate any of the bond points, you have to face legal issues, and the case will be in favor of the lenders.
Can You Sell a Car on Finance?
Yes, you can sell the car on finance, but there are specific steps and methods that you need to follow. Some of the methods are discussed below.
Option 1: Pay Off the Loan Before Selling
The first method is to pay off the remaining loan of the car and get full ownership. Do the proper documentation of this ownership. The car financer will provide you a certificate at the end that all the due amount is paid and the buyer is the full owner of the car and then you are free to sell it.
Steps to Follow:
- Contact Your Finance Provider:
Go to the lender and ask about the total amount remaining to get full ownership of the vehicle. - Arrange for Payment:
Arrange the remaining amount in different ways such as savings, bonds, or lending money from the person to whom you are selling the car. - Obtain a Clearance Letter:
Get the clearance certificate from the finance body. That certificate will be legal authority for you that you are the full owner of the car now after paying all the dues. - Sell the Car:
After getting the clearance certificate, you are free to sell the car to anyone whom you want. Now no one can take legal action against you.
Option 2: Transfer the loan to the buyer
You can send all the installment amount to the buyer, and he will pay the remaining balance to the finance body. But you need to discuss these details with the lender and buyer first.
Steps to Follow:
- Discuss With Your lender:
Discuss the issue with the finance provider and inquire if is it allowed for the buyer to give the next installments and at which conditions. - Find a Willing Buyer:
Discuss the details with the buyer and tell him all the terms and conditions of installment payments. If the buyer allows the financier to check his credit records then you are set to go. - Complete the Paperwork:
Arrange an agreement between the finance body and the car buyer to go further on their own.
Key Considerations When Selling a Car on Finance
1. Know Your Car’s Market Value
First, you should know the car’s value. Sometimes the car value is greater than the installment amount left to pay to the financer. In this case, you have to bear a great loss in selling the car.
2. Check Your Finance Agreement
Check the finance agreement as some of them have points that you can’t sell the car in the way discussed in point no. 3 above.
3. Factor in Early Repayment Fees
Sometimes, the finance party gets some charges if you pay the full loan amount all at once.
4. Transparency is Key
Sometimes buyers and car finance companies can create trouble while doing all the deals so you have to keep a close eye on it so that all processes go smoothly and transparent.
FAQs About Selling a Financed Car
1. Can I Sell a Car with Negative Equity?
Yes, you can sell a negative equity car, however in this case you have to manage some extra amount of money through personal savings or loans.
2. What Happens If I Don’t Pay Off the Loan Before Selling?
In this case, you can’t get the certificate of final authority of the car. You will face legal complications afterward when you try to sell the car.
3. Can I Trade in a Financed Car?
Yes, you can trade in a new car. In this case, the dealer pays off your installment or waves off them and puts your remaining loan in some other car.
4. Is Selling a Financed Car Legal?
Yes, it is completely legal but you should follow the selling steps that I mentioned in this article. Otherwise, you may face legal difficulties.
Wish to buy a New Car and Need Finance Help? Consider Kiwi Car Loans!
Kiwi Car Loans offer competitive vehicle finance with a wide range of lenders. Sitting in between lenders and customers, out team provides professional and efficient service to find affordable finance options for your next car, motorbike, caravan, boat or jet-ski. We have a strong relationship with dealerships and lenders nationwide and offer a 100% online process with excellent customer service. Apply for finance now or use our calculator to secure the best car finance deals in NZ. Or call us today on 0800 448 734.
In conclusion
You can sell your financed car with some restrictions and a legal environment. You should have a clear idea of the terms and conditions of the agreements and ways to fix the legal difficulties. By following the steps mentioned here in the article, you can sell the car confidently and smoothly
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OUR INTEREST RATES VARY BETWEEN 9.95% AND 23.00%.
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