If you are finding yourself wanting a vehicle that’s still under finance, you’re likely asking yourself Is it even legal? To answer this question, yes you can, but there are some steps and legalities that are involved that you might need to follow.
In this blog, we will break down how to sell a financed car and make sure that everything remains above board, especially if you’re looking for car removal or seeking cash for cars in Adelaide.
You can sell your financed car, but first, you must understand that the vehicle legally belongs to the lender until the loan is completely paid off. When a car is under finance, it is considered as collateral for the loan, which means that until you fully pay off the loan, the lender retains a legal interest in the car.
Steps to Selling a Financed Car
Get a Payout Figure from Your Lender
Before you advertise your vehicle for sale, ask your lender for a “pay-out figure.” This is the amount you must pay to liquidate the loan completely and can differ from your statement balance due to interest or fees.
Sell to a Dealership or Private Buyer
Once you know that the payout has been figured out, you can easily sell the car to a private buyer or a dealership. In any case, you will be required to disclose that the car is under finance. It is an important step to ensure transparency so the buyer understands that ownership can only be transferred once the loan is completely paid off.
Use Cash for Cars Services
If you’re in Adelaide and looking for an instant and convenient sale, services offering cash for cars sound like an ideal option. These services generally include car removal as part of their complete package, which means you can avoid the hassle of transportation and important paperwork. Several companies will pay off the remainder of your loan directly to your lender, simplifying the entire process.
Pay Off the Loan
After finding a buyer, the next step will be to pay off the outstanding loan. If the sale price is higher than the loan payout figure, you will pay the difference. , If it’s lower, you will need to cover the shortfall to settle the loan money.
Transfer Ownership
Once you have repaid the loan, and the lender removes his or her interest in the car. You can transfer ownership to the new buyer only after removing the interest of the lender.
Benefits of Using Cash for Cars Services
If you have considered using a cash for cars Adelaide service, many advantages can make the process more easier for you:
Quick and Simple Process: These services specialize in purchasing cars instantly, which is perfect if you want to make cash fast or want to avoid a lengthy private sale procedure.
Instant Payment: Once a deal is finalized, many cash for cars services will offer instant cash or bank transfer, making sure you have enough funds available to pay off your loan right away.
Free Car Removal: Most companies offer cash for cars including free car removal as part of the deal, meaning you won’t have to worry about how to tow the car or pay any additional fees for towing.
No Need for Advertising or Negotiating: Selling a car privately would involve advertising, negotiating, and meeting several interested buyers, hence such hassle is neglected on getting cash for cars services since they will provide you a price upfront.
What Happens If You Don’t Pay Off the Loan?
It’s crucial to note that if you do not pay your loan before selling the car it can lead to serious legal consequences. If you sell the car without settling the loan beforehand, you’re violating your loan agreement. This could result in:
The lender can repossess the car, even if you’ve already sold your vehicle to someone else. The new buyer could lose the vehicle, and you might face some legal action.
If you fail to pay off the loan, it will negatively affect your credit score, further making it harder to secure any loans in the future.
Lenders can pursue legal action against you for the outstanding balance if the loan is not settled as promised.
Conclusion
It’s perfectly legal to sell a car that is under finance, but you have to go through a few procedures to get it concluded properly. Sell it privately or to a dealership or through a cash for cars Adelaide service, but what’s most important is that the loan is fully settled before the new owner is transferred with ownership. Even car removal services can easily make the situation easier by dealing with transportation and paper works thus, making it all very smooth and hassle-free.
By learning your financial situation, obtaining a payout figure, and choosing the right way to sell your car, you can easily navigate the process of selling a financed vehicle without facing any legal issues.
Is It Legal to Sell a Car Under Finance? Here’s How to Do It