Can You Sell a Car with an Auto Loan?
2 Answers
You cannot sell a car with an auto loan. Below are the specific reasons and solutions: 1. During the car loan process, the lender uses the vehicle as collateral. Only after the loan is fully repaid will the lender return the vehicle's mortgage certificate to the owner. Before the loan is cleared, the owner does not have the freedom to sell the vehicle; 2. If the owner must sell the car for certain reasons, they can negotiate with the buyer to have the buyer pay a certain amount to cover the remaining loan balance. Once the auto loan is fully repaid, the owner will have absolute ownership rights.
As a car owner, I've encountered similar situations. Selling the car is possible but with conditions. When the auto loan isn't fully paid off, the vehicle has a lien and you'll need to settle the loan before transferring ownership. Selling options include private sale or through used car dealers: for private sales, after receiving payment from the buyer, you must first repay the bank to release the lien; dealers might advance the payment before reselling. The crucial calculation is whether the car's net value exceeds the remaining loan to avoid negative equity. Sharing my experience - last year I sold an SUV with ¥20,000 remaining on the loan. I contacted the bank in advance for a payoff statement, and during the private sale, the buyer wired funds directly so I could repay the loan and complete the title transfer. While the process was somewhat tedious, I recommend keeping all receipts to prevent disputes and consulting professionals for added security. In short, take your time and proceed carefully.
