Many car owners with a loan will probably wonder what their options are to sell the car. It is often assumed that it is simply not possible to sell a car with a current loan, but the reality is somewhat more complicated. HighPare explains in which cases it is possible to sell your car and how you can best approach it.
Do you want to sell your car?
Suppose that you, like many others, have financed a car with a loan. It is not inconceivable that you want to sell the car a few years later. Many changes may have taken place since the time of purchase. Maybe a new family member has been born, so you need a bigger car. Or it is possible that you no longer need the car due to a change in your work situation. Whatever the reason, it is no longer useful for you to keep the car and because of the annual depreciation it is better that you sell the car as quickly as possible.
Do you have a personal loan?
With a personal loan the issue is very simple. The car you purchased with the personal loan may be sold without any interruption from the financial institution from which you applied for the loan. Personal loans are intended for all purposes, which means that the bank has no expressiveness. That is also the reason why the interest rates for personal loans are higher than for car loans. The bank has no control over your expenses and therefore takes a greater risk.
Before you buy a new or used car, you must of course pay off the current loan. Hopefully that is already possible with the money from the sale, so that you can pay off the loan early. This saves you money on the loan because you pay less interest, but there are limits to how much you can save. The bank misses out on money because you pay earlier and it is possible that the bank therefore asks for partial compensation.
Do you have a car loan?
If you have financed the car with a car loan, the answer is not that easy. This is because it depends on your contract, which can vary per lender. A car loan is a loan with a specific intention, namely the financing of a car. That is also the reason why you must prove to the bank what you are using the money for. Sometimes the car serves as collateral. For example, the bank may confiscate the car if you do not pay off the loan on time.
Yet it is not a lost business to sell your new or used car with a current car loan. The bank simply wants you to pay off the loan. If selling the car allows you to pay off the loan, the bank may agree. Therefore, talk to your bank and negotiate whether it is possible to sell the car. Whether the bank agrees will depend on the bank itself and the details of your current situation.
In any case, it is important that you ask all the conditions for selling your car before the loan is over when you apply for your loan. Naturally, you must also read the contract carefully, which may state that under no circumstances may you sell the car before the loan has been paid off.
If you take out a new car loan after the sale of your car, it is best to compare and simulate all car loans in advance so that you end up as cheaply as possible.