Can a Car Be Sold If It's Mortgaged?
2 Answers
A mortgaged car cannot be bought or sold because such transactions constitute fraudulent behavior. Essentially, a mortgaged car still belongs to the lending institution or bank and not to the purchaser. Below is the relevant information: Regulations: According to China's Guarantee Law, ownership cannot be mortgaged—only the right to use can be applied for as collateral. This is the fundamental reason why a mortgaged car cannot be transferred. Even if the bank auctions the mortgaged car, the transfer of ownership still cannot be processed, as stipulated by law. Transfer Process: As long as the mortgage agreement has not been terminated, the transfer of ownership cannot be processed. However, once the mortgage is lifted, the mortgaged car can be legally transferred.
Yeah, I've been in that situation too. I wanted to sell my car and get a new one while still having an outstanding auto loan. Honestly, it was quite a dilemma. First, you need to figure out if there's a lien on the car, meaning the bank or lender still holds the title as collateral. If I wanted to sell, I'd have to either pay off the remaining loan or negotiate with the lender to get a release letter proving the debt is cleared. Otherwise, the buyer might find out they can't transfer the title, and the deal could fall through. Last time I dealt with this, I got help from a knowledgeable friend who helped me check the vehicle's ownership records in advance to confirm there were no hidden issues before successfully selling it. My advice is to contact your lender early to clarify the process—don't procrastinate, or it might delay your plans to upgrade. Remember, clearing the debt before selling is non-negotiable.
