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How Do You Sell A Car Under Finance: What To Know – Cashforcarmelbourne.com.au

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Selling a car under finance can be a challenging task, especially if you’re not familiar with the process. At Cash for Car Melbourne, we understand the intricacies involved and are here to guide you through every step. This comprehensive guide will help you understand how to sell your financed car quickly and easily, ensuring you get the best deal possible.

Table of Contents

Understanding the Basics of Selling a Financed Car

When your car is under finance, it means that the lender (usually a bank or a financial institution) holds a lien on the vehicle. This lien needs to be cleared before you can transfer the ownership to a new buyer. Here are the basic steps involved in selling a financed car:

  1. Know Your Loan Balance: The first step is to find out how much you owe on the car. This can be obtained from your lender.
  2. Determine the Car’s Market Value: Use online tools, dealerships, or car valuation services to estimate your car’s current market value.
  3. Calculate the Difference: Subtract the loan balance from the car’s market value. This will help you understand if you have positive equity (car’s value is higher than the loan balance) or negative equity (car’s value is lower than the loan balance).

Steps to Sell Your Financed Car

1. Contact Your Lender

Before you proceed, it’s crucial to contact your lender and inform them of your intention to sell the car. They will provide you with the exact payoff amount and explain the process for releasing the lien. Some lenders might even have specific procedures or forms that need to be filled out.

2. Evaluate Your Options

You have several options when selling a financed car:

  • Sell to a Dealership: Many dealerships, including Cash for Car Melbourne, are experienced in handling financed cars. They can pay off the loan directly and settle any remaining balance with you.
  • Sell to a Private Buyer: You can find a private buyer willing to pay off the loan and purchase the car. This option might require more effort but can sometimes result in a higher sale price.
  • Trade-In: Trading in your financed car for another vehicle at a dealership can simplify the process as the dealer will take care of paying off the loan.

3. Prepare Your Car for Sale

To get the best price for your car, ensure it is in good condition. Clean the car thoroughly, fix any minor issues, and gather all necessary documents, including the title, loan payoff information, and maintenance records.

4. Advertise Your Car

If you decide to sell privately, advertise your car on various platforms like online marketplaces, social media, and car sale websites. Be honest about the car’s condition and the fact that it is under finance. Transparency will build trust with potential buyers.

5. Negotiate with Potential Buyers

When negotiating with potential buyers, be upfront about the payoff process. Some buyers might be unfamiliar with buying a financed car, so be prepared to explain the steps involved. If a buyer is ready to proceed, you will need to coordinate the payoff and transfer of ownership.

6. Complete the Sale

Once you have agreed on a price with the buyer, follow these steps to complete the sale:

  • Pay Off the Loan: The buyer or the dealership will pay off the remaining loan balance to your lender.
  • Transfer Ownership: Once the loan is paid off, the lender will release the lien and you can transfer the title to the buyer.
  • Receive Payment: After the lien is released and the title is transferred, you will receive the remaining balance (if any) from the buyer.

Special Considerations

Selling with Negative Equity

If you owe more on the car than its market value, you have negative equity. In this case, you will need to pay the difference out of pocket. Here are a few options:

  • Pay the Difference: Pay the remaining loan balance to your lender directly.
  • Roll Over the Loan: Some dealerships might offer to roll over your existing loan into a new car loan, though this can increase your debt.

Using a Car Buying Service

Using a car buying service like Cash for Car Melbourne can simplify the process significantly. We handle all the paperwork, pay off your loan directly, and offer competitive prices for your vehicle. This eliminates the stress and hassle of selling privately.

Benefits of Using Cash for Car Melbourne

At Cash for Car Melbourne, we offer a seamless and transparent process for selling your financed car. Our benefits include:

  • Quick and Hassle-Free Transactions: We provide an efficient process to get you cash for your car quickly.
  • Competitive Offers: We offer top dollar for your vehicle based on its market value.
  • Expert Assistance: Our team of experts will guide you through every step, ensuring a smooth transaction.
  • Loan Payoff: We handle the payoff directly with your lender, making the process straightforward and stress-free.


Selling a car under finance doesn’t have to be a complicated process. With the right knowledge and assistance from professionals like Cash for Car Melbourne, you can navigate the process smoothly and get the best value for your vehicle. Whether you choose to sell to a dealership, a private buyer, or use a car buying service, understanding the steps involved will help you make informed decisions and achieve a successful sale.

For more information or to get a competitive offer for your financed car, contact Cash for Car Melbourne today. We’re here to help you every step of the way.

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