Sell a Car on Loan? Here's How to Regain Control

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Are you looking to sell your car but still have an outstanding loan on it? You're not alone. Many Australians find themselves in this situation and wonder how to navigate the complexities of selling a vehicle that is still under finance. Understanding your options and the necessary steps can save you time, money, and stress.

Understanding Selling a Car on Loan

Selling a car that's still under finance involves a few key steps that differ from selling a car outright. When you finance a vehicle, the lender holds a secured interest in the car until the loan is paid off, typically registered through the Personal Property Securities Register (PPSR). This means that before you can transfer ownership to a new buyer, you'll need to settle the outstanding loan amount.

This process might seem daunting, but with the right information and preparation, you can successfully sell your car and settle the loan. Let's explore how this can be achieved in the current 2026 Australian market.

Current Market Conditions and Key Information

In 2026, interest rates for car loans in Australia typically range from 6.49% to 12%, depending on various factors such as your credit score, the loan term, and the lender. When considering selling your car on loan, these rates and terms play a crucial role in calculating your payoff amount.

Before selling your car, you need to determine the exact amount remaining on your loan. Here’s a summary of key considerations:

Aspect	Details	Considerations
Interest Rate	6.49% - 12%	Varies by lender and credit score
Loan Term	Typically 3-7 years	Shorter terms can mean higher payments
Outstanding Loan Amount	Varies	Contact your lender for the exact figure

At Esteb and Co, with our access to 83+ lenders, we can help you find the best options tailored to your situation, whether you are refinancing or considering a new loan.

Steps to Sell a Car on Loan

Here’s a step-by-step guide to help you through the process of selling your car while it’s still under finance:

1. Determine Your Loan Payoff Amount: Contact your lender to get your current payoff amount. This is the total amount you need to pay to clear the loan.
2. Check Your Car’s Market Value: Use online tools or consult a professional to understand the current market value of your car. This helps you set a realistic selling price.
3. Find a Buyer: Once you have a clear idea of your car's value and loan payoff, start looking for buyers. Be transparent with potential buyers about the car being under finance.
4. Negotiate the Sale: Discuss with the buyer about how the loan will be settled. Commonly, the sale price can be paid directly to the lender to clear the loan, and any difference can be settled with you.
5. Complete the Transaction: Once the loan is paid off, the lender will release their interest in the car, allowing you to transfer the ownership to the buyer officially.

Tips and Considerations

• Consult Your Lender Early: Your lender might have specific requirements for selling a financed car. Understanding these early can prevent roadblocks later.
• Consider Refinancing: If the current loan terms are unfavourable, refinancing might be an option to reduce your financial burden before selling.
• Be Transparent with Buyers: Honesty about the car's status can build trust with potential buyers and facilitate a smoother transaction.
• Seek Professional Help: Consider engaging a professional to handle the paperwork, especially if you're unfamiliar with the legalities involved.

Frequently Asked Questions

• Can I sell my car privately if it's under finance? Yes, but you must settle the loan before the buyer can take ownership. Arrange for the sale proceeds to pay off the loan directly.
• What if my car's value is less than the loan amount? You’ll need to cover the shortfall to clear the loan. Consider refinancing options if necessary.
• How do I know the exact amount to pay off my loan? Contact your lender for a payout quote, which includes the remaining principal plus any applicable fees.
• Can Esteb and Co help with refinancing? Absolutely. Our access to 83+ lenders allows us to find competitive refinancing options tailored to your needs.
• Do I need to notify my lender if I sell my car? Yes, it’s essential to inform your lender, as they will need to release their interest in the vehicle once the loan is settled.

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