Sell a Car on Loan? Discover How to Regain Control

Finding yourself in a situation where you need to sell a car that is still under a loan can be daunting. Whether it's due to financial strain, a change in lifestyle, or simply the desire for a different vehicle, navigating this process requires careful consideration and knowledge. At Esteb and Co, we understand the complexities involved with loans and are here to guide you through the process with confidence and ease.

Understanding Selling a Car on Loan

Selling a car that is still under a loan can seem complicated, but it is a common scenario that many Australians face. Essentially, a car loan is a secured loan where the car acts as collateral. This means that the lender has a security interest in the vehicle until the loan is fully paid off. To sell the car, this interest must be cleared, which usually involves paying off the remaining loan balance.

Current Market Information and Loan Details

As of 2026, the Australian car loan market offers a range of interest rates, typically between 6.49% and 12%, depending on your credit score, the age of the car, and the lender's criteria. It's crucial to understand these rates and how they impact your loan before proceeding with a sale.

To sell your car, you will need to determine your loan's payoff amount. This is the total remaining balance, including interest, fees, and any early repayment penalties. Contact your lender for this figure, as it's essential to know exactly what you owe.

Steps to Selling a Car on Loan

Here’s a step-by-step guide to help you through the process:

1. Determine Your Payoff Amount: Contact your lender to get the current payoff amount. This includes the remaining principal, interest, and any applicable fees.
2. Assess the Car's Market Value: Use platforms like RedBook or Carsales to gauge the current market value of your car. This will help set a realistic selling price.
3. Find a Buyer: You can sell privately, to a dealership, or trade-in for another vehicle. Each option has its pros and cons, so choose what best suits your needs.
4. Negotiate the Sale: If selling privately, negotiate with potential buyers. Be transparent about the loan status, as the buyer will need to be involved in the payoff process.
5. Complete the Sale and Pay Off the Loan: Once a price is agreed upon, the buyer will typically pay the lender directly to clear the loan. Any remaining funds from the sale will go to you.
6. Transfer Ownership: After the loan is settled, transfer the title and registration to the new owner.

Tips and Considerations

Here are some expert tips to consider when selling a car under a loan:

• Check for Early Repayment Fees: Some loans have penalties for paying off early. Ensure you understand these costs before proceeding.
• Consider Refinancing: If your loan interest rate is high, refinancing might lower your payoff amount, making the sale more profitable.
• Use a Trusted Lender: At Esteb and Co, we have access to an extensive panel of 83+ lenders. This gives you flexibility and choice in finding a solution that suits your situation.
• Be Honest with Buyers: Transparency builds trust. Inform potential buyers that the car is under a loan, and explain the steps to clear it.

Frequently Asked Questions

Can I sell my car if I still owe money on it?

Yes, you can sell your car, but the loan must be paid off first. This usually involves the buyer paying the lender directly.

What happens if I sell my car for less than the loan amount?

You will need to pay the difference to the lender out of pocket to clear the loan.

Can I trade in a car that is still under loan?

Yes, dealerships can handle the loan payoff during a trade-in, but it’s crucial to ensure the trade-in value covers the loan balance.

How can I find my car's payoff amount?

Contact your lender to request the current payoff amount, which includes the remaining balance and any fees.

Is it better to sell privately or to a dealership?

This depends on your priorities. Private sales might yield higher prices, but dealerships provide convenience and handle loan payoffs.

What if I've lost my loan documents?

Contact your lender for a copy of your loan agreement and any details you need to complete the sale.

Can Esteb and Co help with refinancing options?

Yes, with access to 83+ lenders, we can assist in finding competitive refinancing options to suit your needs.