Selling a Financed Car – Everything You Need to Know!

Looking to buy a used car?

6L+ Vehicles ✓ Trusted Sellers ✓ 100% Finance

Give us a missed call07941055729

How to Sell a Financed Car?

Are you thinking of selling a car that has an outstanding loan? Read on to learn a few things about selling a vehicle on loan.

When selling a financed car, the seller, the buyer and the financier are involved in the transaction.

What are the Tips for Selling a Financed Car?

Getting an NOC from the bank after clearing the loan

The registration certificate of a financed car will have an "HP" symbol denoting it to be a car with an outstanding loan. This means the financier owns the vehicle until the loan amount is paid off.

It would help if you got an NOC from the lender to sell the car with an outstanding loan. You must keep two copies of Form 35, RC, a photocopy of your PAN card, PUC form, and insurance policy to get an NOC from the lender.

Once the paperwork and documents are ready, you must visit the lender, clear the loan or foreclose the same (payoff amount), and avail of the NOC.

What if You Cannot Foreclose the Loan?

If you cannot close the loan pre-term, you can ask the new buyer to pay the loan amount to the financier if the price of the car is equal to or less than the balance loan amount. You must pay extra if the car's value exceeds the outstanding loan amount.

Maintaining a good rapport with the buyer will help transfer the loan to them. If you retain the car in good condition, the buyer will happily pay the outstanding loan amount and buy the vehicle from you.

You must also remember that the lender can auction your vehicle if you miss paying the EMIs for a long time.

Wrapping Up

Selling a car with an outstanding loan can sometimes be a hassle and time-consuming. People do not always want to buy a car that is on finance. You must calculate and estimate the duration it might take to get through the whole process before selling a car on finance or buying one. It would help if you kept a tab on the additional charges levied on the closure of the loan and such procedures to skip unnecessary limitations in the transaction.