Can a car with a mortgage be sold?
2 Answers
A car under mortgage cannot be bought or sold during the loan repayment period; it can only be sold after the loan is fully repaid. Expanded knowledge about buying and selling a mortgaged car during the repayment period: Reasons why buying and selling is not allowed during the repayment period: This is because a car purchased with a loan has been registered as collateral with the lending institution. If the car loan has not been fully repaid, the collateral registration cannot be canceled. A car without canceled collateral registration cannot undergo transfer transactions, and thus cannot be bought or sold. Solutions for buying and selling during the repayment period: If the buyer is willing to pay the purchase price to the car owner first to repay the loan, then after all car loans are fully repaid, they can apply to cancel the car's collateral registration and complete the transfer procedures. Alternatively, the owner can borrow money from relatives or friends to repay the car loan before proceeding with the sale.
I previously had a car that I wanted to sell before the loan was fully paid off, only to find out that the loan had to be settled first. I remember the car loan was from a bank, and the title was held as collateral, so the bank needed to clear the debt before the sale. I contacted the lending bank to confirm the remaining loan amount, then negotiated with the buyer to have them pay the bank directly or complete the transaction after I settled the debt. This way, both parties felt secure without worrying about ownership issues. During the transfer process, I had to bring the bank's release of lien document to the DMV to complete the formalities—it was quite a hassle but necessary to follow the proper procedure. After selling the car, the financial pressure eased significantly. So, it's possible to sell a car with an outstanding loan; the key is not to cut corners and proactively handle the debt clearance.
