How Do You Sell a Truck with a Current Outstanding Loan?

Selling a Financed Commercial Vehicle

If you want to sell your used truck on loan, you must keep a few things in mind. The procedure is not similar to selling a car with no outstanding loan. Whatever the reason for selling the truck, here is how to sell the vehicle on loan.

Only the buyer and seller are involved when selling a commercial vehicle. However, when you sell a financed commercial vehicle with a pending loan, a third party, the financing agency, also comes into the loop.

Here is how you can sell a financed truck quickly.

What is the procedure for clearing the loan and getting an NOC from the bank?

When you buy a truck or any commercial vehicle on loan, the truck's RC will indicate the term "HP" on it. This indication stands for hypothecation. This means that the financier has full ownership of the commercial vehicle till you complete the last payment of your loan amount.

It would help if you got an NOC from the bank or financier to sell the vehicle on loan. You will need two copies of Form 35, the original Registration Certificate, a photocopy of the self-attested PAN card, the PUC certificate, and a copy of the vehicle insurance to complete this process. Once your papers are ready, visit the bank or the financier, clear the loan dues or foreclose the loan (payoff amount), and submit all the required documents.

What if You Cannot Foreclose the Loan?

If you cannot foreclose the loan by paying in full, you can ask the buyer to pay the loan amount to the bank directly to the financier if the truck's price is equal to or less than the balance loan amount. However, you must pay an additional amount if the truck's value exceeds the outstanding amount.

Ensure you have a trustworthy rapport with the buyer and keep things as transparent as possible. The upkeep and maintenance of your truck are significant because if your vehicle is in good condition, the buyer will likely pay the outstanding loan amount and buy your vehicle quickly.

The financier or the bank will auction your vehicle if you fail to pay the dues on time or miss payments of the EMIs for a very long period. The bank will seize and auction your commercial vehicle to recover the loan amount. However, auctioning the truck may sell your vehicle for a lower value than usual. You may be at a loss if the bank auctions the truck. This way, you can absolve yourself from any outstanding auto loans.

Transparency is Key

Honesty and transparency in all your transactions will lead to successful coordination and results. You must be honest with the buyer and the financier when selling a truck on loan. Always give complete and accurate information about the vehicle's condition and the outstanding loan amount. This will result in the successful sales of your financed truck.

Wrapping Up

Always remember that selling a truck or commercial vehicle with an outstanding loan can be time-consuming and tricky. Not everyone wants to buy a used commercial vehicle on loan. It would help if you calculated and approximately estimated the time it might take to get through the process. You can also use the vehicle loan calculator to calculate the outstanding loan amount and other additional surges levied on the closure of your loan. The commercial vehicle loan EMI calculator will also be helpful if you plan to buy a new truck, minivan or any other commercial vehicle for your business on finance.