Can a Car Bought on Installment Be Sold?
2 Answers
A car bought on installment can be sold. Here are some details about selling a car bought on installment: 1. Financed Car: A car purchased with a loan can be sold, but the sale is not unrestricted while the loan is outstanding. This is because the vehicle is mortgaged to the bank until the loan is fully repaid, and a vehicle with a mortgage registration cannot be freely bought or sold. 2. Selling a Financed Car: You can choose to sell the car after the loan is fully repaid, or you can request that the buyer directly settle the outstanding amount in advance. Both methods allow for the sale. Most transactions are conducted under a retention of title arrangement, where the ownership of the car remains mortgaged and does not belong to the buyer until the full payment is made.
I previously bought a car with a loan, and later wanted to upgrade to a new model, so I tried selling it. It turned out that selling was possible, but I had to pay off the loan first. The bank told me the total amount I owed, and after I gathered the money to pay it off in one go, they gave me the vehicle lien release document. With this, I went to the DMV to complete the transfer, and the buyer could smoothly take over. The whole process took about two weeks and wasn’t too troublesome. The key is not to delay—arrange the repayment before selling to avoid getting stuck halfway. If the car’s value is lower than the outstanding loan, you’ll need to cover the difference yourself, or no one will take it. I recommend communicating with the bank early about the repayment amount and assessing the market value before taking action. This method also helped me save on interest, which worked out well.
