Can a Car with an Outstanding Loan Be Sold?
2 Answers
If a vehicle still has an outstanding loan, it cannot be bought or sold. Below are the specific details regarding the transfer or sale of a car purchased with a loan: A car bought with a loan does not have the vehicle registration certificate, which is required for transferring ownership. The loan must be fully repaid before the car can be sold. Whether the car loan is obtained from a bank or a small loan company, the vehicle is mortgaged to the lending institution, and the loan applicant does not have ownership of the car. Therefore, until the car owner repays the loan in full, the transfer of ownership cannot be processed, and the car cannot be sold. The borrower must cancel the mortgage registration to sell the car normally. The borrower can first repay the outstanding loan and then complete the vehicle mortgage release procedure, enabling the transfer of ownership and the sale of the car.
Previously, I also sold my car before paying off the loan. The process is doable but quite troublesome. The key is to first contact the bank or financial institution to settle the outstanding loan balance and obtain the vehicle registration certificate before transferring ownership. At that time, I used a used car platform's advance payment service—they first transferred funds to pay off the loan, and after I got the title (commonly known as the 'big green book'), the ownership transfer was completed. The whole process took two to three weeks, and the platform charged a 5% service fee. A reminder to everyone: be cautious with private transactions. Don't easily trust buyers who say, 'I'll pay the down payment first to help you repay the loan.' Last year, my neighbor fell for this scam and lost 80,000 RMB, ending up with neither the car nor the money.
