Steps to Take When Wanting to Sell Your Car with Ongoing Finance


Selling a car with ongoing finance can be a bit more complicated than selling a car that is fully paid off. However, with the right steps and precautions, it is possible to sell your car while still having an outstanding loan. In this article, we will discuss the necessary steps you should take when wanting to sell a car with ongoing finance.

Check the Outstanding Loan Balance

The first step in selling a car with ongoing finance is to determine the outstanding loan balance. This information can be obtained by contacting your lender or checking your loan statement. It is important to know the exact amount that needs to be paid off in order to complete the sale.

Calculate the Car's Market Value

Once you know the outstanding loan balance, it is important to determine the market value of your car. You can use online car valuation tools or consult with car dealerships to get an estimate of how much your car is worth. This will help you set a realistic selling price.

Assess the Equity in Your Car

If the market value of your car is higher than the outstanding loan balance, you have what is called positive equity. This means that you can sell the car, pay off the loan, and potentially have some money left over. On the other hand, if the outstanding loan balance is higher than the market value of the car, you have negative equity. In this case, you will need to come up with the difference in order to pay off the loan.

Inform Your Lender

Before proceeding with the sale, it is important to inform your lender about your intention to sell the car. This is necessary as the lender holds the title to the car until the loan is fully paid off. They will provide you with the necessary documents and instructions to complete the sale process.

Once you have all the necessary information and approvals from your lender, you can start advertising your car for sale. Make sure to provide accurate details about the car's condition, mileage, and any additional features. You can use online classifieds, social media platforms, or even traditional print media to attract potential buyers.

Negotiate the Sale Price

When potential buyers show interest in your car, you will need to negotiate the sale price. Keep in mind that you will need to pay off the outstanding loan balance with the proceeds from the sale, so make sure to set a price that allows for this. It is important to be flexible and open to negotiations while ensuring that you will be able to settle your loan.

Complete the Sale

Once you have agreed on a sale price and found a buyer, it is time to complete the sale. You will need to provide the buyer with all the necessary paperwork, including the title transfer documents and any other documents required by your state or country. Make sure to follow the legal requirements to transfer ownership properly.

Settle the Outstanding Loan

After completing the sale, you will need to settle the outstanding loan balance with your lender. This can usually be done through a direct payment from the buyer or by using the proceeds from the sale. Once the loan is fully paid off, the lender will release the lien on the car, and the buyer will officially become the owner.

Notify Your Insurance Company

It is important to notify your insurance company that you have sold the car and are no longer the owner. This will prevent any potential issues with insurance coverage and ensure that you are not held liable for any accidents or damages that may occur after the sale.

Consider Selling to a Dealership

If you are having trouble finding a buyer for your car with ongoing finance, you may consider selling it to a dealership. Some dealerships specialize in buying cars with outstanding loans, and they can handle the loan settlement process for you. Keep in mind that selling to a dealership may result in a lower selling price compared to selling to a private buyer.


Selling a car with ongoing finance requires careful planning and coordination with your lender. By following the steps outlined in this article, you can ensure a smooth and successful sale while settling your outstanding loan. Remember to accurately assess the equity in your car, inform your lender, advertise the car for sale, negotiate the price, complete the sale, and settle the outstanding loan. With the right approach, you can sell your car with ongoing finance and move on to your next vehicle.

24 October 2023
Written by John Roche