Can a car with a mortgage be sold?
3 Answers
A car under mortgage cannot be sold during the loan repayment period; it can only be sold after the loan is fully repaid. Extended knowledge about selling a mortgaged car during the repayment period: 1. Reason why it cannot be sold during the repayment period: This is because the car purchased with a loan has been registered as collateral with the lending institution. If the car loan has not been fully repaid, the mortgage registration cannot be canceled. A car without canceled mortgage registration cannot be transferred or traded, hence it cannot be sold. 2. Solutions for selling during the repayment period: If the buyer is willing to pay the purchase price to the car owner first to repay the loan, the car loan can be fully repaid, followed by applying to cancel the car mortgage registration and completing the transfer procedures. Alternatively, the owner can borrow money from friends or family to repay the car loan before proceeding with the sale.
I've checked the relevant information, and it's indeed possible to sell a car that's under financing, but the loan issue must be resolved first. The bank is considered half-owner of the vehicle until you pay off the outstanding balance, and the title certificate might be held by the bank. The simplest method is to gather the funds to pay off the remaining loan in one lump sum, so you can get the title and proceed with the normal transfer process. If you're short on cash, you can discuss with the buyer to use their down payment to release the lien first. However, there's a catch here: if the buyer gives you the money directly and you divert it for other uses, failing to release the lien afterward could lead to legal consequences. Nowadays, some platforms offer third-party fund escrow services specifically to address such trust issues. For the detailed process, it's recommended to consult the lending bank directly.
From my experience, the key to financing a car transaction lies in risk control. Last year, a friend sold his car and encountered a situation where the buyer paid a 50,000 yuan down payment but ended up losing it in stock trading, leaving the loan unpaid and preventing the transfer of ownership. It wasn't resolved until it went to court, and the car was temporarily held by the bank for half a month. My advice is to ensure the buyer is fully involved in the repayment process—for example, have the buyer pay the bank directly by card while you handle the mortgage release at the counter on the spot. Also, check whether there are any early repayment penalties, as some banks charge around 3% of the remaining principal. Remember to keep all repayment receipts, as the DMV requires your ID, loan clearance certificate, and bank authorization letter for the mortgage release.
