Sell a Loaned Car? Unlock Options When Banks Say No

Imagine this: you're ready to upgrade your vehicle, but your current car still has an outstanding loan balance. You might wonder, "Can I actually sell my car if it’s still under finance?" You're not alone—many Australians face this dilemma, especially with the ever-evolving automotive market in 2026. The good news is, while selling a loaned car can be complex, it's entirely possible with the right knowledge and approach.

Understanding Selling a Loaned Car

When we talk about a "loaned car," we're referring to a vehicle that has been financed through a loan. Essentially, this means the lender holds a financial interest in the car until the loan is fully repaid. In Australia, this is a common scenario, with many individuals opting for car loans to manage their finances more effectively. However, this also means that if you want to sell your car before the loan is paid off, there are specific steps and considerations to keep in mind.

Key Information: Rates, Requirements, Options

As of 2026, car loan interest rates in Australia typically range from 6.49% to 12%, depending on factors such as the lender, your credit score, and the loan term. Understanding these rates is crucial if you're considering selling your loaned car and potentially refinancing the remaining balance.

Key requirements to sell a loaned car include:

• Obtaining a payout figure from your lender, which is the total amount owed, including any applicable fees.
• Ensuring you have a clear plan to repay the existing loan balance.
• Understanding the terms and conditions set by your lender regarding early repayment or sale of the vehicle.

Options for selling a loaned car include private sale, trade-in at a dealership, or using a car buying service. Each option has its pros and cons, which we’ll explore further.

Option	Pros	Cons
Private Sale	Potentially higher sale price	More effort and time-consuming
Dealership Trade-In	Convenience and speed	Likely lower sale price
Car Buying Service	Quick and hassle-free	May not get the best price

Steps to Sell a Loaned Car

Here's a step-by-step guide to help you navigate the sale of a car that's under finance:

1. Contact Your Lender: Request a payout figure to understand how much you owe, including any early termination fees.
2. Consider Your Sale Options: Decide whether to sell privately, trade in, or use a car buying service based on your needs and timeline.
3. Prepare Your Car for Sale: Ensure the car is clean, well-maintained, and has all necessary documentation, like the service history and registration papers.
4. Negotiate the Sale: Once you have a buyer, negotiate the sale price. Be transparent about the car's finance status.
5. Use Sale Proceeds to Pay Off the Loan: Once you receive payment, use it to settle the outstanding loan balance with your lender.
6. Transfer Ownership: Finalise the transfer of ownership with the buyer and ensure all documents are correctly processed.

Tips and Considerations

Selling a loaned car requires careful planning and consideration. Here are some expert tips to guide you:

• Understand Your Lender’s Policies: Different lenders have varying policies regarding selling a financed vehicle. Check with your lender about any restrictions or fees.
• Evaluate Market Conditions: The Australian car market can fluctuate. Stay informed about current market conditions to ensure you're selling at a favourable time.
• Consider Refinancing: If you’re struggling with a high-interest rate, refinancing your car loan might make financial sense before selling.
• Seek Professional Advice: If in doubt, consult with a financial advisor or a reputable mortgage broker like Esteb and Co, who can guide you through the complexities of selling a loaned car.

Frequently Asked Questions

1. Can I sell my car if I still owe money on it?
Yes, you can sell your car while it’s under finance, but you must settle the remaining loan balance with the sale proceeds or through other means.

2. How do I find out how much I owe on my car loan?
Contact your lender to request a payout figure, which will include the remaining loan balance and any additional fees.

3. What happens if I sell my car for less than the loan amount?
If the sale price is less than the loan balance, you’ll need to cover the shortfall using other funds to clear the debt.

4. Is it better to trade-in or sell privately?
Trading in is more convenient but may yield a lower price. Selling privately can be more profitable but requires more effort.

5. Can Esteb and Co help with selling a loaned car?
Yes, Esteb and Co have access to a comprehensive panel of 83+ lenders and can provide tailored advice to help you navigate the process.

6. Do I need to inform the buyer about the car loan?
Yes, transparency is crucial. Inform potential buyers about the car’s finance status and how you plan to settle the loan.

7. What if I can’t sell my car for the amount I need?
Consider negotiating with your lender for alternative arrangements or seeking advice from a financial expert.