How to Sell a Car with Finance Still Owing

Cars can be expensive, and in New Zealand it's not uncommon to take out a car loan to finance your purchase. You might have a good understanding of how to service your debt, but sometimes the situation changes, or the loan becomes more significant than expected, and you can’t make your car payments. So, can you sell a car with finance owing? Yes. This article will highlight essential tips to get it done without a hitch.

Prepare Your Car for Sale

Selling a car with finance owing needs some preparation first. This includes giving it a good clean, inside and out, making necessary repairs, and gathering all the essential documents, like the registration and release of liability. You can sell your car privately or through a dealership.

Privately

If you're selling a car with finance owing in NZ privately, there are a few things you need to do to ensure you complete the process correctly. First, get in touch with your lender and tell them you plan to sell the car. They'll likely need to provide you with a 'payout figure,' which is the amount of money you need to pay back for the lender to release the car's registration.

Once you have this figure, it's time to find a buyer. Suppose you're using an online classifieds site like Trademe - mention that there is finance on the car in your listing. This way, buyers will know up front and can factor this into their decision.

Through Dealership

Most sellers consider this option the best bet. Here's how it works: the dealership will pay off your outstanding loan and then sell the car on consignment. You don't have to worry about finding a buyer or negotiating a price as you'll get the money from the sale, minus the dealership's commission.

There are a few things to keep in mind, though:

First, the dealership will likely want you to leave a deposit, which they will hold onto until the car sells. Also, they may also charge you a consignment fee; and third, they will probably only accept vehicles in good condition.

Determine the Payoff Amount

You'll need to find out how much money you still owe on the car before you can sell it. The payoff amount is the total amount of money required to pay off your auto loan, which may differ from what you originally agreed to pay. To find your payoff amount, ask for a payoff statement. If you're unsure who your lender is, contact the dealership that sold you the car or your previous one.

Research the Value of the Car

Once you know what you could sell your car for, it's time to start researching its worth. Trademe has a free car valuation tool, which is a good place to start - this will give you a fair estimate of what private buyers might be willing to pay for your car. You can also check other online classifieds websites and see what similar cars are selling for in your area.

Consider Financing First

If you're selling a car with finance owing, your options are slightly more limited than if you owned the vehicle outright. You'll need to find a buyer willing to take on your loan or pay off the remaining balance yourself before you can sell the car.

To determine whether it would be cheaper to sell the car and pay off the loan, or find a buyer who will take on your current financing agreement, use this formula: divide what you owe on the vehicle by its market value (minus taxes and registration fees). The result is how many months of payments it would take for that new owner to complete the payment.

Advertise Your Car

You've done your research, and you're ready to advertise your car. But before you do, there are a few things you need to keep in mind. First, take some clear, well-lit photos of the exterior and interior of your car. Ensure the images show any appealing features or details.

Next, write a detailed description of your car, including its make, model, year, mileage, and other relevant information. Be honest about any damage or problems the car has; buyers will appreciate your honesty, which will help them make an informed decision.

Change Ownership

After completing all the transactions, you can use the NZTA website to transfer ownership of the car. It's an ideal site for private sellers because you can fill out the necessary forms online and transfer ownership within minutes. This functionality doesn't depend on the time of day, provided the buyer has a New Zealand driver's licence.

We have your back if you are looking for fair finance for your new automotive with low rates. We offer better car loans with interest ranging from 7.95% to 13.95% annually. Also, you don't have to pay the deposit to get your car on the road. Apply for a car loan today using the button below!

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.