Selling a car with finance owing on it might sound tricky, but it’s a common situation for many Kiwis. Whether you are looking to trade it up or down, or simply sell your vehicle while still owing debt, it’s important to know your options. At Car Body Removals, we’ve helped countless New Zealanders across the country sell cars still under finance. Our team are only too happy to help customers understand the process of selling a car with money owing. Read on below to find out how you can sell your vehicle while it is still under finance.
Understanding What “Money Owing” Means
If a vehicle has “money owing” on it, this generally means that there is an outstanding car loan or finance plan in place. The lender technically has an interest in the vehicle until the debt is fully paid off. What this means for the sale of your vehicle is that you can’t transfer full ownership to someone else until the debt is settled. For people buying a vehicle under finance, there is a risk of repossession if the seller hasn’t disclosed the finance plan. This is why it’s important to approach the sale with full disclosure and transparency. These factors only apply if the loan is secured against the vehicle, whereas if the loan is secured against something else like a house mortgage, the sale is straightforward.
Is It Legal to Sell a Car with Finance Owing?
Selling a car with finance owing is perfectly legal in New Zealand. However, it’s important to disclose the finance to any potential buyers. Full disclosure and transparency around the sale helps to avoid legal disputes down the road. It is common for buyers to check the PPSR (Personal Properties Securities Register) to confirm whether or not the car has any outstanding debts. As the seller, being upfront about the situation always works out best in the end for both parties involved.
Options for Selling a Car with Money Owing
There are a few options available when it comes to selling a car with finance owing, such as:
- Pay Off the Loan Before Selling
- The easiest way to sell your car if it is under finance is to pay off the outstanding loan before listing it for sale. Once the loan is cleared, any money you make from the sale is entirely yours.
- This approach simplifies the process and gives potential buyers confidence that there are no financial strings attached.
However, we understand that this may not be possible for everybody so there are a few other options available.
- Sell the Car and Pay Off the Debt
- Another option is to sell the car and use the proceeds to pay off the loan. In this case, the buyer either pays you the full sum and you pay off the debt yourself, or the buyer can pay the lender directly with any remaining balance from the debt paid to you.
- Providing proof that the debt has been cleared is always a good idea to help avoid future complications.
- Negotiate with Your Lender
- Another way to navigate the sale of a car with finance owing is to talk to your lender directly. Whether it’s a bank, a car dealership or a private sale, they might allow you to transfer the debt to another existing asset or arrange an early settlement. Some specialist car finance companies will have procedures in place to handle sales where the loan is yet to be repaid.
- Work with Professionals
- Partnering with a trusted car removal company like Car Body Removals helps to ensure the process is simplified and straightforward.
- Working alongside people who have experience in the car sale industry and know how to navigate sales with finance owing can make the whole sale a lot less stressful.
Why Choose Car Body Removals?
At Car Body Removals, we specialise in buying used cars of all shapes and sizes. With so much industry experience, we know the best way to deal with cars that have money owing against them. Our team of experts know all the tips and tricks to make the process as seamless and simple as possible. Here’s why people all over the country choose us:
Transparency: We provide clear and honest valuations and help you to understand how much of the sale will go towards clearing the money owed on the vehicle.
Hassle-Free Process: From arranging paperwork to offering free car removal services, we handle the details so you don’t have to.
All Vehicle Types Accepted: We don’t mind what state your car is in – whether it’s old, damaged or simply unwanted, we’ll give you a fair offer.
FAQs About Selling a Car with Money Owing
Can I sell my car if I owe more than it’s worth?
Yes, but you will need to cover the shortfall out of pocket to settle the loan.
What happens if the buyer doesn’t clear the debt?
If the debt isn’t cleared properly, the lender can repossess the car regardless of who currently owns it.
How long does the process take?
In a private sale, it can be a lengthy process. With Car Body Removals, the process can be completed quickly and efficiently, often with cash in your hand within 48 hours.
While it may sound like a headache, selling a car with money owing doesn’t have to be a complicated procedure. By understanding your options, being transparent and upfront and working alongside professionals like Car Body Removals, you can navigate the process smoothly.
If you’re ready to sell your car or have any queries about clearing finance on a vehicle, contact us today for expert advice and a no-obligation quote. Let us help you turn your car into cash, stress-free!
