Plenty of people want to sell a car they're still paying off. It's possible, but the loan has to be dealt with as part of the sale — and being upfront about it from the start makes everything simpler.
Why finance matters to a buyer
When a car is used as security for a loan, the lender has an interest in it until the loan is repaid. In Australia these interests are recorded on the Personal Property Securities Register (PPSR). Careful buyers search the PPSR before buying, because a car with finance still attached can be repossessed by the lender — even from a new owner.
That's why any legitimate buyer will want the finance cleared as part of the sale.
Step 1: Get a payout figure
Contact your lender and ask for a payout figure — the exact amount needed to close the loan on a given date. Payout figures can include fees and change daily, so ask how long the figure is valid.
Step 2: Compare it with what the car is worth
If the car is likely to sell for more than the payout figure, the difference is yours once the loan is cleared. If it's likely to sell for less, you'll need to cover the gap. Knowing this early helps you decide whether selling now makes sense.
Step 3: Arrange how the loan is cleared
There are different ways this can work — for example, paying the loan out yourself before the sale, or arranging for part of the sale proceeds to go to the lender. The right approach depends on your lender and your buyer. Ask your lender what they require and get confirmation in writing once the loan is closed.
Be upfront when you enquire
If you're selling to us, mention any finance owing in the additional information box on the enquiry form. It won't stop you enquiring — it simply means we'll discuss how the payout would work for your situation.
Checklist
Before selling a car with finance:
- Lender name and loan account details
- Current payout figure and how long it's valid
- Registration papers and service history
- Written confirmation from the lender once the loan is closed
This guide is general information only, not legal or financial advice. Vehicle values depend on the individual car and market conditions. Check Service NSW for current registration and transfer requirements.
