Can a New Car Purchased with a Loan Be Sold?
2 Answers
A car purchased with a loan cannot be freely sold before the loan is fully repaid. The borrower only has the right to use the vehicle and cannot transfer ownership. This is because the vehicle is mortgaged to the bank until the loan is settled, and a vehicle with a mortgage registration cannot be freely bought or sold. Points to note: 1. Verbal agreements are not guaranteed: Unless the consumer applies for an unsecured personal loan from the bank and uses the funds to purchase the car in full at a dealership, other forms of auto loans do not qualify for full discounts available with cash purchases. Car dealers often make verbal promises of various benefits, but unwritten commitments are merely empty talk. To avoid future disputes, consumers should carefully consider their auto loan options. 2. Understand the repayment methods: Banks typically offer two repayment methods for personal auto loans: equal principal and interest payments and equal principal payments. Equal principal and interest payments result in higher total interest but provide consistent monthly payments, distributing repayment pressure evenly. Equal principal payments decrease over time, with lower total interest compared to equal principal and interest payments, but the initial payments are larger. Consumers should think carefully about whether they can handle the higher early payments.
My first car was a Toyota Corolla bought with a loan. I drove it for less than a year before wanting to switch to an SUV due to moving. The agent said a car with an outstanding loan couldn’t be transferred because the green book (vehicle title) was mortgaged to the bank. I calculated that I was still short of 56,000 yuan to cover the remaining loan balance and penalty fees, so I had to borrow from relatives to pay it off first. It took another two weeks for the bank to send back the mortgage documents, and in the end, I sold the car for 8,000 yuan less than expected. So, if you really want to sell a car with a loan, there are only two options: either gather the money yourself to release the mortgage first, or find a used car dealer to advance the funds, but they charge a 10% service fee. Recently, I heard some platforms allow transferring ownership with the mortgage still in place, but it’s not yet widely available.
