Want to sell your car but still owe money on it? Here, you can find out how to sell it. Even though it can be hard to sell a car with a loan, that doesn’t mean it can’t be done. There are a lot of Aussies who choose to sell their vehicle while they still owe money to them. So you need to know how to do it right, so you don’t get in trouble.
If you want to know how to sell a car that is still owed money on, or if you want to buy a car that is still owed money on, this guide will help you learn some of the things you need to know about selling a vehicle that is still owed money on.
Financing the sale of a car
Before we get into the details of what must happen when buying or selling a car with a loan still on it, let’s look at where problems can occur and why it’s essential to follow the rules.
The lender owns a car that has been financed
When you sell a car, you give the money to the new buyer in exchange for vehicle ownership. But if you have a secured loan on the car, technically, the car doesn’t belong to you. Instead, the loan is tied to the vehicle, no matter whose name is on the title.
If you sell your car, the person buying it thinks it is theirs. The vehicle is registered in their name, and they use it as if it were theirs. The main problem here is that if you don’t use the money from the sale of your car to pay off your car loan, the credit company that gave you the loan can legally take the car back from its new owner if you don’t pay back your loan.
If you were the buyer, you might have saved or borrowed money to buy a used car, only to have a credit company come to your door and take it away to pay off the loan the previous owner had. Because of this, it is imperative to let the new buyer know if you still owe money on the car so it can be paid off before or at the settlement.
Vehicle Encumbrance is only used for loans with collateral
An “encumbered” vehicle is just one that has a secured car loan with a balance that is still due. The only time a car is encumbered is when it is used as collateral for a car loan (i.e. a secured car loan). So if you bought your car with an unsecured loan, the vehicle isn’t tied to the loan and isn’t “encumbered” by the loan.
But it is best to check the Personal Properties Securities Register (“PPSR”) to see any liens on the vehicle you are trying to sell or the car you want to buy. A PPSR search should tell you everything you need to know about existing liens, and the investigation is very cheap.
It is legal to sell a car that is still being paid for, but here’s what you should do to avoid much trouble:
1. Know how much you still owe on your car loan
2. Put your car on the market
3. Expect checks and inspections
4. Making the deal happen
At Cash For Cars QLD, some of the things we do best are car loans, car financing, and personal loans. We’re happy to help as much as possible, whether you’re looking for a new car or a loan for a used car but need to sell your current car first.
Call our office at 1300 320 462 to find out how we can help you get a loan so you can get your new car faster, even if you already have a loan.
