A vehicle financed through a loan can, in certain cases, be sold even if the repayment has not yet been completed. There are a number of steps to follow and conditions to meet in order to carry out such an operation. Want to sell a car?
Indeed, the nature of the loan and the various clauses specified in the credit agreement must be taken into account before the possible sale of a car still under credit.
Simulate your loan to sell a car
Constraints related to the nature of the loan
Regarding the constraints related to the nature of the loan. First, the latter conditions the possibility of selling a car financed by a loan. For example, if the borrower purchased the vehicle through an unsecured loan, the lending institution does not require any justification regarding the use of the granted capital. This applies notably to personal loans or consumer credit. In this case, the borrower can dispose of the vehicle as they see fit, even if the credit institution has contributed partially or fully to its acquisition.
Sell your vehicle?
Conversely, if the financing of the purchase of the car was done through a car loan, the sale is not always permitted. According to the credit institution, this type of loan can be accompanied by the pledging of the vehicle. In this case, it is impossible to sell the car as long as the loan is not fully repaid because legally, the lending institution is the owner. However, it is possible to negotiate with the bank if the proceeds from the sale of the car are used to repay the loan.
Loan agreement clauses
Regarding the loan agreement clauses, it is important to carefully read the loan agreement before considering selling a vehicle purchased with the help of a credit institution and still being repaid. Indeed, some clauses may stipulate that the borrower cannot sell the vehicle, the object of the loan, without the lender’s consent. In this case, it is essential to contact the lender to seek their approval.
Additionally, it is always useful to review the terms of the loan agreement regarding vehicle ownership. If the document states that the car remains the property of the lending institution until the loan is fully repaid, it is then inadvisable to proceed with its sale to avoid violating the law for misappropriation of pledged assets.
