If you are wondering about whether you can sell your car if it has an existing loan, yes you can! It just requires a few extra steps and might take a little bit more time.
When the car has an existing and ongoing loan, the lender is considered a part owner of the vehicle. The lender’s name may be listed on the car title or the lender may actually hold the title. This is to prevent you from transferring the title to the new owner without the lender collecting all of the money that is owed to the lender. Whether you want to sell your car to a private party or trade it in to a dealer, you need to know how much you still owe on your loan. On top of that, you will also need to assess whether it is more or less than what you will get by selling your car, and how your lender may require you to proceed with the transaction. Below are a few scenarios to consider!
Buyer pays in cash
This is the easiest and cheapest way to transact! The buyer just has to pay the agreed amount, plus RM30.00 for the B5 Puspakom Ownership Transfer Inspection, plus another RM100.00 to transfer the ownership of the vehicle to the Road Transport Department (JPJ). Your existing hire purchase loan is settled, and you can get your new car without any worries!
However, do take note that banks usually only allow you to sell your car or trade it in after 5 years (for a car loan term of 9 years) and after 4 to 5 years (for a car loan term of 7 years) as some banks may impose fines or penalties for early loan settlement.
Buyer requires an additional loan
If the buyer needs to take a loan to buy your car, the bank would require a more in-depth report, the B7 Puspakom Hire Purchase Inspection Report, that would cost RM60.00 and takes more time to process instead of the normal B5 report! The buyer also will arrange for his/her own hire purchase loan approval before you can close the deal, which will have more lead time while pending for his/ her bank to approve the said loan. Do note that this process is only valid if the sale value of your car is more than your balance loan. You may simply book an appointment with our ez inspection centre via www.ezauto.my to get your car inspected and evaluated for free!
In case the sale price is lower than the outstanding hire purchase loan amount, the difference will have to be topped up by the seller! You will have to make the differential payment to your bank to get the relevant loan settled and get the paperwork done before the whole process can be concluded. However, most banks will require the outstanding hire purchase loan to be settled in full by the borrower before the car can be sold off, which may pose a huge challenge to most sellers.
Want to sell your car without having to worry of the above discussed problems and hassles? Look no further! Sell your car through www.ezauto.my to fetch the highest price possible via bidding by car dealers from nationwide the ez and hassle-free way!