It goes without saying that burgeoning debts can take a toll on anyone’s life. If you’re in such a situation and want to sell your car because it’s getting too taxing, here are a few things to consider. First question that you should ask yourself is whether your car loan stopping you from selling your car.
You may be wondering if you can transfer the loan to the buyer without necessarily having to pay off the debt. In reality, a car loan based on the hire-purchase financing principle makes the bank to be the owner of the car until you clear the debt. So the deal is, you cannot transfer the ownership of your car to a buyer when you are not the owner in the first place.
Tips on How to Sell Your Car When You Still Owe
Don’t be disappointed, though. Here are a few ways with which you can settle the loan and successfully sell your car.
1. Pay Off the Debt with Savings
The simplest solution is to utilise your savings to pay off the debt. This enables you to make a fair trade of selling it while being the owner of your car.
Coming to talk about your savings, we know how difficult it is to give away the hard-saved money over a long span of time. Worry not when you can put the same amount back in your savings account from the sum the car buyer pays.
2. Approach a Car Dealer
Selling a car to a dealer may not be as bad an idea as buying a used car from the dealer. When you look from the perspective of the risk involved, it is good to sell your car to a dealer. Negotiate with the dealer and try to bring the price up as much as possible. Also, it is necessary to be transparent about the actual debt you owe to the bank so that he/she can help you to the fullest.
Once you are done with the negotiations, the dealer will pay the agreed sum to relieve you from all the hassles of selling it by yourself.
3. Receive Deposit from Buyer
Talk to the lender as to how much money you owe in total to get a clarity on what sum you have to arrange. Figure out the market value for your car so that you will be able to know if selling it can be profitable. It is good to be informed if you need to pay an early settlement fee since you are paying off the loan before the tenure.
Once you are sure of the actual amount you have to pay to the bank, you can quote this price. If this amount is lower than the current market value of your car, you can have some pennies in your hand after all the payments.
When you finalise a deal, ask the prospective buyer to deposit the money to your account electronically before the completion of the procedures. This way, the transaction will be recorded as well as you will receive the required money to clear the debt.
In a week’s time, the bank will update the JPJ and transfer the ownership to you. You can then initiate the process to transfer the ownership to the buyer.
It’s well and good if your lender/bank does not consider the car as collateral. Selling the car does not require you to clear the debt or anything. The game gets a bit tough only when your loan considers the car as collateral. Pick the method that is convenient for you and, then, selling the car wouldn’t be a big deal. Take the help of comparison websites to learn more about how car loan works.
Siddharth is a Content Marketing Journalist at BBazaar.my, an online consumer financial marketplace in Malaysia that will help Malaysians to make the smart choice and save money with personal financial matters. Stay tuned and learn about current financial market and products including credit cards, personal loans, insurance and more.