4 ways to sell a car with an outstanding loan
When you buy a car, you probably remember the moment when you first got in the car and drove it home. Eventually, the time will come for you to sell it. However, if you still have an outstanding loan on your car, you may run into some issues. In this article, we will go through 4 ways to sell your car with an outstanding loan!
Selling to a cash buyer
This is the easiest way to sell a car with an outstanding loan because there are few hurdles, saving both time and money.
There are 3 easy steps.
- Pay off your loan. You can use your own money or the buyer can provide the funds needed to pay off the loan. After paying it off, you will receive the Vehicle Ownership Certificate (VOC), also known as the car grant. If the buy price is not enough to cover the loan, the owner will have to chip in and pay out of pocket.
- After receiving your VOC, you will need to get a PUSPAKOM B5 Report which proves your car is roadworthy. You will need to pay RM3.50 for the appointment and RM30 for the inspection.
- Lastly, the owner and buyer will have to go to a JPJ office for the ownership transfer. This will cost RM100. Before you go, prepare the following documents:
- Your original MyKad
- VOC
- If you are going without the buyer, prepare their name, MyKad number and address.
All in all, you will need to spend RM133.50!
Reminder: Check if there is pre-payment penalty!
Before you sell your car, you should check if there is a pre-payment penalty or early payoff fee with your bank. Banks generally have a lock-in period whereby the owner is not able to pay off the loan without incurring the penalty. This is so the bank can collect interest on your loan. A lock-in period is usually 5 years for a 9-year loan and 4 to 5 years for a 7-year loan.
Read more: How to avoid car repossession
Selling to a buyer with a car loan
Selling your car to a buyer with a loan is slightly more complicated as the buyer’s bank will want to ensure the car is roadworthy and valuate the car before they give them a loan.
- Get a B7 PUSPAKOM Hire Purchase Inspection which will cost RM60. This inspection is more detailed than the PUSPAKOM B5 Inspection and will take longer.
- After getting the B7 Form, the buyer can go to the bank and apply for the loan. The car’s outstanding loan must be equal to or lower than the car’s value, otherwise, the buyer’s loan will not be approved.
- If the loan is approved, the banks will handle the transfer of ownership.
What can the buyer do if the outstanding loan is lower than the car’s value? The car can still be sold to the buyer provided the owner pays the difference.
For example, if the car’s outstanding loan is RM20,000 and the bank provides the buyer with a RM15,000 loan. The owner has to pay RM5,000 to sell his car.
To avoid the above situation, you will need to ensure your car’s value is higher than the outstanding loan. To do that, you can get a free valuation with Carro before you sell your car!
Sell your car to a used car dealer
Another option is to sell your car to a used car dealer who usually has the money to buy your car outright. In this case, it is more like a cash buyer with a few key differences. Firstly, the valuation will be done by the dealer and if you accept the buying price, they will take care of everything including the PUSPAKOM inspection. However, dealers often charge fees that can amount to RM5,000! These charges include sales costs that include service fees, processing fees, stamp duties and more.
Sell your car with an outstanding loan fuss-free with Carro
When you sell your car, you definitely want to maximise your earnings and save time and energy. That’s why Carro provides a fuss-free car-selling experience that is simple, fast and secure.
- Free inspection: Book a FREE car inspection on our website. You can drive to the nearest Inspection Centre or have our mobile inspectors go to you!
- Get our best offer: After inspecting your car, we will give you our best price ASAP!
- Minimal paperwork: We’ll take care of the nitty-gritty parts of the paperwork so you don’t have to.
If you are ready to sell your car with Carro, book a FREE car inspection today!
