Sell a Loan Car? Here's How to Gain Control (2026)

You've purchased your dream car with the help of a loan, and now life has thrown a curveball. Whether it's financial strains, a need for an upgrade, or a change in circumstances, you might find yourself asking, "Can I sell a car that's still under finance?" It's a common dilemma for many Australians, and while it may seem complex, with the right knowledge and approach, it can be managed smoothly.

Understanding Selling a Loan Car

Selling a car that's still under finance means you're trying to sell an asset that technically isn't entirely yours yet. The lender holds an interest in the car until the loan is fully repaid. This interest is registered on the Personal Property Securities Register (PPSR). It's crucial to understand this concept, as selling a car with an outstanding loan can have legal and financial implications.

In Australia, it's perfectly legal to sell a financed car, but the process requires careful handling to ensure both the buyer and seller are protected, and the lender is satisfied. Typically, the outstanding loan amount must be cleared before the car's ownership can be transferred to the new buyer.

Current Market Information and Loan Details

The Australian automotive market in 2026 remains robust, with over 1 million new cars sold annually. However, the trend towards sustainable and electric vehicles is reshaping consumer preferences. This shift can affect the resale value of certain vehicles, particularly those with higher emissions.

When considering selling a loan car, it's essential to understand the specifics of your car loan. In 2026, interest rates for car loans range typically between 6.49% and 12%, depending on the lender and the borrower's credit profile. Lenders associated with Esteb and Co, for instance, offer competitive rates and flexible terms, thanks to our access to a panel of 83+ lenders.

Eligibility criteria for selling a financed car typically include clear communication with your lender, understanding the loan's payout amount, and ensuring the car's value covers the remaining balance. Often, lenders will require a payout figure, which is the total amount needed to settle the loan, including any early termination fees.

Steps to Selling a Loan Car

Here’s a step-by-step guide to navigate the process of selling your loan car:

1. Contact Your Lender: Inform them of your intention to sell the car. Request a payout figure, and ask about any fees or charges associated with early repayment.
2. Value Your Car: Use online tools or consult a professional to determine your car's current market value. Ensure it's enough to cover the loan balance.
3. Negotiate with Buyers: Be transparent with potential buyers about the car's finance status. Buyers are often willing to deal with a financed car if the process is clear.
4. Finalise the Sale: Once you have a buyer, the sale can proceed with two common options:
   • Pay off the loan before the sale and transfer the vehicle free of encumbrances.
   • Have the buyer pay your lender directly to clear the loan, with the remaining balance paid to you.
5. Transfer Ownership: After the loan is settled, transfer the car’s registration to the new owner, completing all necessary paperwork.

Expert Tips and Considerations

Selling a financed car doesn't have to be a headache. Here are some expert tips to streamline the process:

• Check the PPSR: A PPSR check will confirm the encumbrance on the car and reassure potential buyers.
• Consider Refinancing: If you're struggling with loan payments but not ready to sell, refinancing could be an option. Esteb and Co can help explore refinancing opportunities with our extensive lender network.
• Communicate Clearly: Honesty with buyers about the car's finance status can build trust and facilitate a smoother transaction.
• Professional Advice: Consult with a financial advisor or a mortgage broker to understand the financial implications of selling your loan car.
• Market Timing: Consider market conditions. Selling during high demand periods can maximise your car’s value.

Frequently Asked Questions

1. Can I sell my car if it's under finance? Yes, you can sell a financed car, but you must settle the outstanding loan first.
2. How do I find out the payout amount? Contact your lender to request a payout figure, which will include any outstanding loan balance and applicable fees.
3. What if my car's value is less than the loan amount? You may need to pay the difference to your lender before completing the sale.
4. Can buyers pay the lender directly? Yes, this is a common arrangement where the buyer pays the lender to clear the loan.
5. Will selling my loan car affect my credit score? Selling the car and settling the loan can positively impact your credit score by demonstrating financial responsibility.
6. Can I negotiate the payout figure? Some lenders may be open to negotiation, especially if you're a long-standing customer.
7. What are the risks of not disclosing finance status to a buyer? Failing to disclose can lead to legal issues and loss of trust, potentially voiding the sale.