Can a Car on Installment Plan Be Sold?
3 Answers
Yes, a car on an installment plan can be sold. A car on an installment plan, also known as a financed car, means the owner only has the right to use the vehicle before the loan is fully paid off, but there is no regulation prohibiting the sale of such a car. According to relevant laws, a car on an installment plan cannot be transferred to a new owner, meaning the buyer only purchases the right to use the vehicle, and the debt is transferred along with it. When buying a car on an installment plan, the buyer should request the original vehicle registration certificate from the seller. Without this document, the transfer of ownership cannot be processed. Additionally, the buyer should communicate with the original owner to determine the remaining loan balance. The total price of the vehicle should be reduced by this amount, and the remaining loan must be paid to the bank to release the lien. Only then can the vehicle be legally purchased.
I've helped a friend deal with this issue before. A car under financing can certainly be sold, but the loan must be cleared first. The first step is to contact the lending bank or financial institution to confirm the outstanding loan amount—some may require advance scheduling for full repayment. If you have the cash, it's best to pay off the loan yourself before selling the car, ensuring clean and clear ownership. Alternatively, you can find a buyer willing to take over the loan and continue the monthly payments, but both parties should sign an agreement to avoid disputes. The key is not to proceed with a private transaction without clearing the loan, as the car remains under lien and cannot be transferred, and you might still be pursued for debt even after receiving payment. I recommend evaluating the car's market value against the remaining loan balance to ensure no loss. It's advisable to use a reputable platform or intermediary to protect both parties' interests. Regular maintenance and timely payments also help minimize extra costs and make the sale smoother.
Last time I encountered a similar situation, I first had the mortgaged car appraised before making a decision. Selling is feasible, but the core issue is resolving the loan. The simplest way is to gather the money yourself to pay off the loan, obtain the title, and then sell. Otherwise, find a buyer willing to take over the loan, but make sure they have good credit to avoid them defaulting halfway and leaving you responsible. I was quite cautious and specifically consulted a friend with banking experience to understand the risks, such as the buyer backing out during the transfer or stopping loan payments, which can lead to many complications. To stay safe, it's best to complete the repayment process in advance or arrange a loan transfer through a dealership to minimize headaches. Remember to keep all transaction records for future reference.
