Can a Car with a Loan Not Be Sold?
2 Answers
A car with a loan cannot be sold. This is because the ownership of the car does not belong to the owner but is under the name of the bank or other lending institutions. The owner only has the right to use the car. Therefore, before the owner repays the loan in full, they do not have the right to sell the vehicle. The owner can take the following steps: 1. Contact potential buyers: Generally, the owner can reach out to potential buyers interested in purchasing the vehicle. They can negotiate with the buyer to pay the amount needed to clear the loan first. Once the loan is settled, the owner can then transfer the car's ownership to the buyer. However, this method is relatively inefficient. 2. Contact used car dealers: The owner can also approach used car dealers. Through the dealer, the remaining loan on the car can be repaid. After obtaining the mortgaged vehicle registration certificate, the car can then be transferred to the dealer, effectively selling the car to them.
I encountered the same issue last year when my car still had a loan, but I wanted to switch to a new one. Selling it was possible, but the loan had to be settled first. The usual approach is to use part of the proceeds from the sale to directly pay off the remaining balance, as the car is mortgaged to the bank. Specific steps: contact the lender to confirm the remaining amount, have the buyer pay the bank directly or transfer the money to me first before I pay, and then proceed with the transfer at the DMV after obtaining the repayment proof. If the loan isn't cleared before selling, it could lead to disputes—the buyer might not be able to transfer ownership, and there could even be legal risks. It's best to find a reliable platform or intermediary to assist, as many apps now offer such services. The whole process is relatively smooth, just requiring a bit more time and patience to handle the details. That's how I handled it back then, and it saved me a lot of trouble.
