The need to sell a loan car can be associated with a variety of reasons, ranging from the desire to change the car to a more modern one, and ending with financial difficulties. Therefore, quite a lot of people are interested in the question - how to do it? There are several options, and each of them is suitable in a particular case. Therefore, in this article we will tell you in detail about all the ways to sell a credit car.
How to sell a loan car
Regardless of whether the title is in the bank or in your hands, there are quite a few legal ways to sell a loan car that is pledged. In total, they can be divided into five main groups:
The classic option with the participation of the bank in payment.
With the help of intermediaries.
Transfer of credit to the buyer.
Obtaining a cash loan to pay off a debt for which the car is collateral.
Sale by proxy.
Each of these methods has both advantages and disadvantages. Moreover, some of them have their own division according to certain subtleties. So let's go in order.
Classic variant
This method of selling a credit car is the most popular and safest for all three parties - participants in the transaction (you, as a seller, a bank and a buyer). Its principle is that after finding a buyer, you agree with the bank that you want to sell your car, and use these funds to repay the balance of the loan. If the commercial structure agrees to such a transaction, then everything happens in six stages:
You are applying for an operation.
The bank opens two accounts. The first will receive the amount necessary to repay the loan, and the second will receive the difference from the transaction amount (the money that you will receive).
The buyer pays the pre-agreed cost of the machine, and these funds are distributed to the two above-mentioned accounts in the required proportion.
The bank writes off the required amount and completely closes your debt, and gives you the rest of the money from the second account.
The credit organization removes the encumbrance from your car.
You document the transaction of purchase and sale of a car, and re-register it for a new owner.
At first glance, it may seem that the procedure is quite complicated, but it is not. The only way it differs from the standard implementation of a used car is to negotiate with the bank and write an application. All other actions that are not included in the standard transaction are actually carried out automatically without your participation.
The disadvantage of this option is that it will only work if the cost of selling the car exceeds the balance on the loan. Basically, this method is applied after at least half of the loan repayment period. Although occasionally cars are sold earlier.
This option, recently, began to be used to alleviate the situation of bank customers whose license was revoked. For example, a person has made a contribution of more than 1.4 million rubles, and you have a loan in the same commercial structure, for which a car is collateral. You agree with the temporary administration or the bankruptcy trustee for the liquidation of the bank on a mutual transaction. Part of the funds (the balance of the loan) is deducted from the buyer's deposit, and he transfers the rest of the cost of the car to you personally. After that, the encumbrance is removed and documentary certification of the sale and purchase is made.
Through intermediaries
Depending on your choice or situation, one of three organizations can act as intermediaries in the sale of a credit car:
The bank itself, at which the car is pledged.
Car dealerships with trade-in service.
Federal bailiff service (FSSP).
The most unpleasant is the third option, since it is applied without your desire in the process of enforcement proceedings. The bailiffs seize your transport and sell it through a specialized auction in favor of paying off the debt. Everything happens without your participation after the delay appears and the bank receives a court decision.
As for the first and second options, you can contact your lender yourself (almost all banks have their own auctions) or a reliable car dealership that provides the trade-in service. After writing the application, handing over the keys and compiling all the necessary documents, your car is put up for sale.As soon as she finds her buyer, the transaction is carried out with little or no participation from you. You will only need to sign the purchase and sale documents. In both cases, the funds under the transaction pass through the bank with which the car is pledged. If there are extra funds after closing the debt, then the commercial structure returns them to you, and if they are not enough, you will have to repay the balance of the loan yourself.
The main disadvantage of this method is that the price of the car is underestimated by 10-20%. Moreover, for faster implementation, both the FSSP and banks with car dealerships resort to this practice.
Transfer of credit to the buyer
This option is the least popular, but it is still found in the sale of mortgage vehicles. To complete the transaction, you will need to find a person who would like to purchase a used car on credit, and also meets the requirements of your bank. You, together with the buyer, apply to your credit institution with a statement of intent to change the borrower.
After receiving applications and the required list of documents, the bank considers the application and makes a decision. If the answer is yes, then you are released from debt obligations, which are transferred to the buyer. Also on this day, the car is re-registered for a new owner. If the cost of the car exceeds the amount of the loan, then the buyer gives you the difference “from hand to hand”.
The main disadvantage of this option is to find a person who meets the requirements of the tank and who wants to issue your used car on credit. This is a difficult task.
Obtaining a second loan to pay off the one for which the car acts as collateral
The name of this method almost completely describes its principle. You draw up a cash loan in another bank, and with the funds received you repay the loan, for which the car acts as collateral. After removing the encumbrance from it, you make a purchase and sale transaction.
The downside is that unsecured cash loans often overpay more than those with collateral. That is, newly issued debt obligations will be more expensive than those that you currently have.
Sale by proxy
It should be noted right away that this method can only be considered if the buyer is your close relative or a very good friend, whose honesty you are 100% sure. The very meaning is that you draw up a general power of attorney for the new owner. In the future, he will pay your debt to the bank in full. You get the difference "from hand to hand".
Convenience lies in the absence of appeals to the bank or intermediaries, the preparation of the necessary documents (except for a power of attorney), etc. After paying off the loan, you will only have to remove the encumbrance from the car.
The disadvantage is that if there are no payments on the loan, you will have problems even if you have a receipt. After all, for the bank and according to the documents, you still remain the owner of the car.
How not to sell a car
On many forums, some users advise to sell credit cars without notifying the bank, transferring the TCP in hand or a duplicate received from the traffic police to the new owner. It's not worth doing that. This is due to the fact that such actions are regarded at the legislative level as fraud, and the punishment for this article is from 2 years in prison. Identical responsibility for the sale of the machine "for spare parts".
We do not advise you to act in this way, even if you want to immediately repay the loan with the money received. There are various situations in life, ranging from the banal temptation to spend funds in a different direction, and ending with robbery.
In the case of buying a car on credit, certain restrictions are imposed on the owner, which are associated with the possibility of transferring the vehicle to the ownership of third parties.
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The purchased vehicle is indicated in the loan agreement as a collateral, which deprives the borrower of the opportunity to sell it or issue a power of attorney to another person.
Sometimes there are situations when there is an urgent need to sell a vehicle to raise additional funds.
Despite significant restrictions, there are several legal ways to sell a car until the full payment of the debt on a loan issued for its purchase.
Causes
When a car owner is faced with the need to sell a car, there can be many reasons for this.
If the loan for the purchase of a vehicle is not repaid, then, most often, the need to sell the vehicle arises due to the deterioration of the financial situation of the borrower.
Also, such a need can be caused by a number of other reasons:
- desire to purchase a newer vehicle;
- moving abroad;
- disappointment in the purchased vehicle.
Regardless of the reason for selling the car, it is very important to do everything within the law, otherwise the borrower may get into serious trouble.
Can I sell my car with a car loan?
If you want to buy a car, then there are several ways to sell a car. In such a situation, the PTS (technical passport of a car) can be located both with the owner and in the bank.
In the first case, the sale process will be much easier, since the borrower will be able to bypass a number of formal procedures.
without bank permission
In most cases, the borrower needs to obtain permission from the bank to sell the car. However, there is also another option, which is related to the early repayment of debt.
If the loan agreement provides for the possibility, then the buyer can repay the remaining part of the loan, and transfer the rest of the amount to the owner of the car, after which the vehicle will become the property of the buyer, and the debt to the bank will be repaid.
Regardless of the current situation, it is better to notify the bank of the intention to sell the car.
If the intention to sell the vehicle is kept secret, then such actions may qualify as fraud on the part of the borrower.
If PTS is on hand
If the car passport is in the hands of the borrower, then the procedure for selling the car is greatly simplified, but most often the documents for the car remain in the bank.
If the TCP is in the hands of the borrower, then the process of selling a car can be reduced to the repayment of part of the loan debt by the buyer, in such a situation, you can do without notifying the bank, if the loan debt is repaid, then the borrower will not have problems.
PTS in the bank
Most often, the vehicle passport remains in the bank until the client fully repays the debt. In such a situation, the process of selling a car to a borrower must be agreed with the bank.
Most often, financial institutions meet customers who want to sell collateral by offering them several options for selling a vehicle.
Legal Ways
When answering the question whether it is legal to sell a car in a car loan, you can find several ways to sell a vehicle at once without violating the law and the terms of the loan agreement.
The borrower can sell the car legally, both in the bank and in the car dealership or on his own. Each of the ways to sell a car has its advantages and disadvantages.
Through a bank
The borrower has the option to sell the car through the bank. In such a situation, it is possible to transfer the keys and documents for the car to the bank, after which the organization will find a suitable buyer, and the proceeds will be used to pay off the debt. The balance is returned to the borrower.
This situation is suitable for bank customers who cannot repay the issued loan.
It is also possible to sell a car at an auction, but this option is most often applied to unscrupulous borrowers, and the cost of a vehicle at an auction can be up to 50% lower than the market price.
If the borrower goes to the bank to sell the car voluntarily, then the amount received from the sale of the vehicle may not completely cover the amount of the debt. In such a situation, the borrower will have to pay the rest of the debt.
Through a car dealership
One of the most common options for selling a car on credit is to contact a car dealership.
Each bank cooperates with several companies that sell cars.
It is in these car dealerships that the borrower should contact. In such a situation, the employees of the salon independently coordinate the process of selling a car with the bank.
The borrower only has to transfer the vehicle to the ownership of the salon, as well as receive part of the cost of the car (as a rule, the borrower receives either a part of the funds already paid on the loan, or the balance of the amount after the sale of the car and full repayment of the debt).
On one's own
In the case of an independent sale of a vehicle, the borrower may encounter a number of difficulties, among which one can single out the need to independently search for a buyer, as well as agree on the conditions for selling the car with the bank.
If we talk about whether it is possible to sell a car if on credit on your own, then there are the following legal ways:
- re-registration of the loan in the name of the buyer;
- loan refinancing;
- change of collateral.
After the buyer is found, a contract of sale can be concluded with him.
On the basis of this document, the buyer pays part of the cost of the car to the seller (part of the amount paid on the loan), after which the obligation to fulfill the loan obligations falls on the shoulders of the buyer.
The borrower can find a loan offer on more favorable terms, which does not require the provision of a car as collateral.
In such a situation, the current debt is repaid at the expense of attracted credit funds, after which the owner of the vehicle gets the opportunity to dispose of it at his discretion.
Sometimes banks meet customers halfway, giving them the opportunity to change the subject of collateral. Most often, the contract specifies the real estate of the borrower as collateral.
Early repayment
Most loan offers on the domestic financial market provide for the possibility of early repayment of debt.
In such a situation, interest is recalculated taking into account the actual period of use of credit funds.
If the borrower has a desire to sell the car, then you can pay off the debt ahead of schedule, after which the borrower will have the right to dispose of the vehicle at his discretion.
Liability for illegal methods
If you sell a car that is pledged, then these actions may be regarded by the bank as fraud.
In such a situation, the borrower will have problems with the bank, which has the right to initiate criminal proceedings against an unscrupulous borrower.
When purchasing a car on credit, the car owner counts on the stability of his income, which can cover monthly payments. But in certain situations, it may be necessary to sell a car for which the loan has not been fully repaid. Is it possible and how to make a deal with less financial losses depends on the nuances of the agreement concluded with the bank and the ability of the institution to meet the borrower halfway under the circumstances.
After registration and acquisition of the latter, until the final payment of the loan, the vehicle belongs to the lender. In accordance with current legislation, a car cannot legally be sold without a title on hand.
Loan car sales options
The reasons for an emergency sale by the owner of a car on loan can be different:
- The family will have a divorce process and the division of property between the spouses.
- The purchased car does not meet the requirements of the owner and a decision was made to purchase a new one.
- The owner decides to sell the car to buy a cheaper model for the final payment of debts to the bank.
- There are no funds to repay a car loan, and it is not possible to find them in any other way.
First of all, you should re-read the agreement concluded with the bank and find out whether the document stipulates the possibility of selling the car before the loan is repaid. In any case, the actions must be coordinated with the credit institution. Some banks do not allow you to sell the vehicle to another person until the final payment of the loan. You should not hide your existing bank obligations to the buyer.
If you submit a statement to the bank about the impossibility of making payments on the loan, the bank will most likely agree to the sale of the property taken on credit, since it is in its interests to collect the amount due from you.
There are several options for selling a vehicle with an outstanding loan:
- Assigning payments on the loan to the buyer who agreed to purchase the car.
- Delegating the sale of a car to the bank that issued the car loan.
- Putting a vehicle up for auction.
- Taking another consumer loan.
- Issuance of a power of attorney for the buyer for a period until the completion of all payments to the bank.
In such cases, some borrowers receive a copy of the vehicle registration certificate (vehicle passport) at the traffic police at the place of residence, citing the loss of the document. But potential buyers treat a copy of the TCP with distrust. In addition, a transaction made without the knowledge of a credit institution can be classified as fraudulent, and the bank that stores the original document will have the right to file a lawsuit. The court will return the car to the creditor, and the buyer will lose the amount paid.
It is possible to sell a car without involving intermediaries if you find a buyer who trusts you. He will transfer the rest of the payments on the loan to the bank. This amount will be considered as an advance payment for the purchase of the car. After paying with the bank and with the TCP on hand, you remove the car from the register. When transferring documents to a new owner and making a purchase and sale, the buyer pays you the remaining amount.
For the buyer, there is a risk when making such a transaction, since even the received receipt for the advance payment does not have special legal force. Before choosing this option for resolving the issue, one should take into account the possible collection by the bank of a commission for early repayment of the debt. In most cases, it is possible to repay the entire debt to the lender not earlier than 3 months after the conclusion of the car loan agreement.
Another version of the transaction is based on trust. The amount owed by the borrower is subtracted from the purchase price agreed upon by the buyer and seller. The rest of the money is transferred to the seller, in return he draws up a power of attorney for the buyer. After the loan payments are completed, the seller receives the remaining amount and the car is registered to the new owner. Neither party in this case has any insurance documentation. Do not forget about the possible consequences of such a transaction. Responsibility for the subsequent behavior of the buyer behind the wheel will have to be borne by the principal.
Also, the loan can be reissued to the buyer, but banks are reluctant to agree to such a deal. The likelihood of the bank agreeing to change the borrower increases if you can convince the lender of your financial insolvency. Registration of a car for a new owner is carried out simultaneously with the imposition of bank obligations on it. The bank may agree to reissue a car loan after monitoring the solvency of a new borrower.
The bank may not be notified of the upcoming sale if the car loan was issued on the guarantee of a third party. In this case, there are no bans on the sale of cars. There is a buyer, the transaction is completed, the debt to the bank is repaid. The guarantor is responsible for repaying the loan, and the ownership of the car does not matter to the lender.
Arrangement with a bank or registration of a new loan
If you have a problem-free credit history, the bank may give permission to sell the car. Sometimes, in order to obtain permission to sell a car, it will be sufficient to find a guarantor whom the bank will believe. A legal entity, for example, your direct employer, can also act as such.
A financial institution-lender may offer to buy your car, but on favorable terms and with a loss of a certain amount for you, as opposed to a direct sale.
The bank usually undertakes to sell a credit car if the balance of the borrower's debt corresponds to its current value in the car market. In this case, the borrower must inform the lender of his financial insolvency.
A loan car can be sold by the bank by agreement with the borrower, but without agreeing with him on the details of the transaction. The owner will only be notified by phone or in writing about the fact of the agreement with the buyer and the sale of the car.
The client of the bank cannot influence the sale price of the vehicle in such a transaction. The proceeds may not be enough to fully repay the loan. The difference between the amount received by the bank after the sale of the car and its market value can be 10-15%. If the loan is repaid, the rest of the money will be returned to the borrower.
If your financial difficulties are temporary, it is legally possible to take a new loan in the status of a consumer.
But not every bank will agree to lending if you have similar obligations to another lender, or the interest on paying a consumer loan will be increased. It makes sense to refinance if you can return the money in a short time.
An option with a re-mortgage is possible, which is mortgaged real estate or a more expensive car, other liquid property. The bank may allow, after providing an equivalent collateral. But at the same time, the pledged property will need to be insured.
When applying for a car loan, the bank usually obliges you to insure the car with a CASCO policy. You can return the unused part of the sum insured if this case has been agreed in the contract with the insurer. Otherwise, the insurance is reissued to the new owner, who returns part of the paid policy to the seller. Such a mechanism for reissuing insurance is possible in the absence of appeals to the insurance company after an accident.
Car dealership or auction
Now in the car market there are specialized firms that purchase any vehicles, including debt ones. In the car dealership, the car is inspected and the attached documents are studied. The owner is offered an estimated amount and upon reaching an agreement with the representative of the company in the presence of a notary, a transaction is executed in a credit institution. The car dealership closes the borrower's loan and, if there is a balance of the agreed amount, transfers it to the seller.
The transaction can be made according to the trade-in scheme. In this option, a car dealership buys a car with the condition that the seller buys a new car. The firm receives the difference between the price of a new car and the cost of an old one after being assessed by an expert. The transaction is carried out in a short time, but the seller may lose from 10 to 20% of the market price of the vehicle. The service is similar to the state program for the disposal of used cars. If you have enough time, it is better to put the car on commission with a decent price.
A loan car can be put up jointly by the bank and the borrower for a general auction. To hold the auction within a short time, the owner of the car will have to set the starting price at about 20% below the market price. But at the end of the auction, the seller often wins over other selling options.
The bidder with the highest bid will be designated as the buyer. The car is removed from the register in the traffic police. With the proceeds from the auction, the former owner closes the debt to the bank, and the title is issued to the new owner of the vehicle.
In case of a long delay by the borrower of transfers on the loan, the bank sends him a letter with a notification of the need to pay the amount due and the interest charged for the delay. If the borrower ignores the requirements, the bank, in accordance with the notarized pledge agreement, has the right to withdraw the pledged property.
In the absence of a formalized pledge agreement, the issue of seizing the car is decided in court. According to the court decision, the borrower must fulfill the loan obligations within 10 days. After this period, the bailiffs get the right to seize the car, and the bank sells it on account of the existing debt.
A loan car is a frequent occurrence, because the purchase is expensive, and the required amount is often not available. Together with the car, the buyer acquires certain credit obligations, and due to the need to pay off a large loan within a short period of time, monthly installments can be overwhelming. A situation arises when it is necessary to get rid of a car loan by selling the car and paying off the debt to the bank, but realizing the collateral is not so easy. The question of how to sell a credit car should be studied when the debt has not yet been paid and there are restrictions on the right to dispose.
There are several options for solving the problem. The choice of a particular path is determined based on individual circumstances.
Is it possible to sell a credit car
When purchasing a car with borrowed funds, the buyer is limited in the right of disposal, reserving the right to drive and use the vehicle for the entire duration of the car loan.
The ban on the sale of a pledged car, other forms of alienation are indicated in the agreement signed with the bank, so any sale without the settlement of legal issues may lead to a violation of the law with subsequent liability.
There are several situations when you need to sell a car on credit:
- Decrease in earnings, loss of a job, other cases of decrease in income and the inability to further service a debt to a financial institution.
- Intention to take a new model, brand.
- Change of region or country of residence.
- Dissatisfaction with the characteristics of the purchased vehicle.
Despite the presence of a ban, it is possible to carry out the procedure for expropriation for compensation if you follow a certain procedure established by law, taking into account the following parameters:
- Place of storage of the title (at the motorist or in the bank).
- The party involved in the sale (bank, car dealership, independently).
It is necessary to understand the features of how a credit machine is released when the debt for it has not yet been paid.
Intending to sell a credit car, it is necessary to study the legal subtleties regarding the disposal of property. You can find the information you need from an agreement with a financial institution.
It should be remembered that the bank primarily cares about maintaining profits, therefore, the parameters of solvency and income that have changed in a negative direction will be taken into account if the borrower notifies in a timely manner that it is impossible to continue payments. The bank's arsenal has several profitable tools that have shown their effectiveness in practice in such situations: restructuring, deferral of payments, revision of other terms of the contract. The first thing to do when the financial situation worsens is to notify the bank. Together with the creditor, acceptable terms of repayment of the debt are worked out.
If the reasons are not related to the deterioration of income, the financial institution will offer to reissue the contract to another individual with the transfer of rights to the vehicle and obligations to pay off the balance of the debt.
Once a firm decision has been made to sell, there are ways to do so legally:
- Obtaining bank permission and independent search for a buyer. After making settlements with the buyer, the seller repays the remaining debt to the bank.
- Re-registration of the object of pledge. To remove restrictions on the rights to 1 vehicle, the borrower offers another security. Not only a car, but also any other liquid property (land, apartment, cottage, etc.) can become the object of a new pledge.
- Refinancing a car loan from another organization. Often, lenders, attracting new customers, offer to re-register the debt without collateral. As a result, the borrower repays the loan at the first bank, removes the encumbrance and sells the released loan. The rest of the debt is paid to the new creditor.
- You can sell a car on credit through a salon that cooperates with the bank. If the implementation process is trusted to the car dealership, then the procedure is further settled, bypassing the borrower, between the salon and the bank.
One of the most convenient ways to sell credit vehicles is to contact a car dealership. Not every seller will be able to accept a car for sale; you can only contact those organizations that work with a particular bank. Their list is specified in the branch of the financial institution.
This method is not always profitable, since part of the funds is lost, however, contacting a dealer makes it possible to delegate the procedure to another contractor who will independently regulate the procedure for transferring rights to a car.
If you decide to do without the help of a car dealership, you cannot do without agreement with the bank. If there are no funds for the full early liquidation of the balance of debt to a financial institution, you can use one of the following methods: 
- Change the object of collateral by offering another property (movable or immovable) that meets the liquidity requirements instead.
- Revision of the terms of the contract if the sale is associated with a deterioration in the financial situation. You will need to present to the bank the presence of significant reasons that led to the loss or decrease in income (medical certificate, liquidation of the enterprise, job reduction).
- Bidding and sale through an auction at a reduced price. There is a risk that the proceeds will not be enough even to liquidate the debt.
- Transfer of rights to a car with registration of obligations under a car loan to a new owner. The scheme also requires a serious discount, because not everyone will agree to purchase a car through additional approval of a loan agreement with a bank.
If the sale is related to the lack of funds to repay the loan, the issue will have to be resolved with the bank in any case.
How to sell if the TCP is on hand
Any transaction with the transfer of transport to a new owner requires a passport for the vehicle, the main document confirming the authority of the car owner. Most lending programs involve the storage of TCP in the bank until the moment of full settlement of obligations. The procedure for how to sell a car bought on credit, if you have a title on hand, is as follows:
- The borrower writes an application asking for approval of the transaction, and the financial institution makes a decision.
- If approved, the debtor will be provided with ways acceptable to the bank: independent sale, involvement of a creditor or a car dealership in the sale, revision of loan conditions, auction sales.
It should be borne in mind that any proposed method will require coordination with the organization of each step of the borrower.
As in the case of storing the title at home, the sale of the car, the main documentation for which is in the bank, occurs in the same sequence.
The basis for the sale of a car in a car loan legally will be the consent of the bank after considering the application of the borrower.
If the bank grants the right to search for a buyer on its own, the question remains how to provide the new car owner with guarantees for the renewal of the title. You can use the services of a notary public and draw up an agreement that provides for the entire process of re-registration.
The new owner buys the car according to the contract concluded through a notary in the following order:
- Elimination of debt on a car loan at the expense of the buyer.
- Release of the car from the mortgage encumbrance.
- The rest of the amount is transferred to the seller, and the car is re-registered.
Given the high risk for the buyer, such a scheme is more suitable for transferring the car in favor of relatives and the immediate environment.
The second way is to change the owner of the car. The procedure takes place in the bank. The buyer becomes a new client of the bank and continues to pay the debt monthly. He also pays the difference to the seller. Here, no one loses anything, and you are left with a clean credit history.
It is difficult to sell mortgaged property. It is important to take into account the imposed restrictions and the need for harmonization.
Not wanting to deal with a time-consuming procedure and a lengthy settlement, some citizens are considering dubious ways to sell a loan car:
- get a copy of the passport at the department of the State traffic inspectorate, declaring the loss of the document;
- sell the car without notifying the mortgagee;
- engage in the sale of the purchased car with spare parts, explaining the reason for the absence of auto theft.
All of the above schemes are illegal and entail liability, up to and including imprisonment.
The most commonly used against offenders are:
- Art. 159 of the Criminal Code of the Russian Federation (fraud);
- Art. 306 of the Criminal Code of the Russian Federation (false denunciation);
- Art. 1102 of the Civil Code of the Russian Federation (illegal enrichment);
- Art. 1107 of the Civil Code of the Russian Federation (illegal use of other people's funds).
With many legal options for re-registration of a credit car, a responsible car owner is unlikely to take on the risks of selling under "gray" schemes. A thorough analysis of the specific situation and the study of various ways of implementation will allow you to profitably sell the car without any risk to yourself or the new owner.
The ability to take a car on credit has made the vehicle accessible to all segments of the population. A person can become the owner of a vehicle almost immediately after inspecting the vehicle.
However, it is not uncommon for an individual to urgently sell a car that is in a car loan. Then the owner of the car may face difficulties.
Where to begin
Dear readers! The article talks about typical ways to solve legal issues, but each case is individual. If you want to know how solve exactly your problem- contact a consultant:
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The possibility of selling the car depends on the type of loan that the owner took to purchase it. If an ordinary consumer loan was received to buy a car, a person is entitled to sell the vehicle without notifying the bank.
You can find out about the type of loan from the documentation. It must be collected regardless of the type of loan.
If a specialized loan was taken to purchase a car, the car is pledged to the bank until the debt is fully repaid. You cannot sell a vehicle that is a guarantee of payment.
In most cases, the PTS is held by the bank. The document will not be issued for processing the transaction. In addition, the current legislation does not allow the sale of a vehicle without notifying the creditor.
If the bank finds out that the borrower has sold the car, the company has the right to demand the immediate return of the vehicle.
If the client decides to apply to a credit institution to obtain permission to sell a car, the person must be prepared for the fact that the company will require other property to be pledged. It must be of equal or greater value. The bank will agree to give consent to the sale if the client offers to leave real estate as collateral.
If the credit organization refuses to agree to the sale of property, the user can take a loan from another organization that does not require collateral. The funds received must be used to pay off the debt. The encumbrance from the pledge will be removed, and the user will be able to sell the car.
Practice shows that you should notify the bank of your intention to sell the car in any case.
If the reason for the sale is a deterioration in the financial situation, the credit institution may allow the action to be taken without repaying the loan, because it is beneficial for the company that the client pay off the loan faster
How can you sell a car if it is in a car loan
Legal Ways
Thinking about whether it is possible to sell a car in a car loan, a person must remember that the current legislation does not prohibit the performance of an action. There are several ways to sell a car for which the loan has not yet been repaid.
These include:
- obtaining bank permission;
- replacement of collateral;
- early repayment of debt;
- sale of a car through a car dealership.
If the owner of the vehicle is in a critical financial situation, he can resort to the services of a car dealership.
If the company's employees agree to complete the sale, they will independently resolve all issues with the bank that issued the loan for the purchase of the car. The former owner of the car will only need to obtain permission from the credit institution to perform the action and transfer the car to the salon.
The downside of the operation is the fact that companies specializing in the resale of cars will not purchase a vehicle at a market price. It will have to be sold for much less.
Through a car dealership
It is easier to sell a secured car through a car dealership. To find out a company that is capable of performing an action, the owner of the car must contact the bank employees at the time of submitting an application for the desire to sell the car. Specialists of a credit institution must issue a list of organizations with which cooperation is being conducted.
The advantage of selling a vehicle through a car dealership is the fact that the owner of the car almost does not take part in the procedure. Employees of the company independently contact the bank that issued the loan and negotiate all the terms of the upcoming transaction.
The car dealership specialists are also looking for a buyer for a car for which the loan has not been repaid. A person who decides to use the service must remember that the proceeds from the sale of the car will first be sent to the bank to repay the loan.
Through a bank
In all other cases, a person who decides to sell a car will have to work closely with the banks that issued the loan.
The possibility of repaying the loan before the expiration of the contract depends on the tariff that the person chose when concluding the contract. In some cases, the bank will require you to pay an additional fee for performing the action or impose a fine.
The possibility of replacing collateral is decided individually in each case. The bank has the right to refuse to accept the thing that the client wants to lay out instead of the car. In case of refusal, the owner of the vehicle will not be able to sell it.
If there is a PTS
Some credit institutions do not require the client to hand over the title of the vehicle when obtaining a loan. In this case, the user is solely responsible for the safety of the deposit. A person who has a car passport in his hands is entitled to sell the car. However, before performing the action, it is mandatory to notify the bank and obtain its permission to perform the action.
An individual who purchases a car will be able to register it legally. However, the car will remain the collateral of the bank. If the client who took the loan fails to pay off the credit institution, the organization will have the right to confiscate property.
In practice, banks do not interfere with the sale of the car, which continues to be a pledge. They are concerned about the return of funds given to the client as a loan.
Companies do not like to seize and sell a vehicle on their own. This is associated with additional costs. In addition, the full cost of the car will not be refunded.
The presence of a title on hand simplifies the procedure for selling a car for which a loan has not yet been paid. However, you should not sell the car without notifying the bank.
If the credit institution finds out that the client has violated the terms of the contract, the company has the right to file an application with the court. The bank's claim will be approved, and the person will be prosecuted under the article fraud.
On one's own
The client, without paying anything to the bank on the loan, can sell the car on his own.
For this you need:
- Notify the credit institution of the action and attach documents explaining the reasons for selling the car. This may be a certificate from work to reduce wages or a document confirming the entry into the labor exchange.
- Wait for the decision of the credit institution. Before giving a positive answer, the bank may offer several alternative ways out of the situation. It can be credit holidays, refinancing or installment plans. If the client still decides to sell the car, the company will issue a permit for the action.
- Find a buyer for the car on your own.
- Come along with a potential buyer to the bank that issued the loan and conclude a contract of sale. Employees of a credit institution independently make a note in the TCP. The money that will be received from the sale of the vehicle will go to pay off the debt to the bank.
- Employees of a credit institution issue a vehicle title to a new owner. However, the action is executed if the buyer transferred the full amount for the purchase of the car. If there is not enough money to repay the loan, the transport remains pledged to the bank. An agreement is concluded between the credit institution and the new owner of the car to compensate for the missing amount.
If the buyer purchases a car on credit, he is obliged to provide the bank with a full package of documents
Other implementation options
There is an alternative way that allows you to sell a car that is in a car loan. The action is carried out through a notary's office, in which a power of attorney is issued. Both the buyer and the seller must agree to the action.
The operation is associated with risks. The fact is that the transfer of funds and obtaining a car passport does not yet make the buyer the owner of the vehicle. If necessary, the former owner of the car can draw up a new power of attorney and restore the transferred TCP to the traffic police.
The presence of documents will allow a person to return the car legally. State authorities will not take into account the claims of the buyer.
The power of attorney is valid 3 years. After the expiration of the term, the buyer must re-register documents for another family member. However, the person will not be able to perform the action due to the fact that he is not the owner of the car.
All rights are in banks until the full repayment of the debt on the loan and the removal of the encumbrance. If during this period of time the car was deregistered and re-registered, a search for the old owner will be required to obtain a new power of attorney.
As insurance, the buyer may require the seller to draw up a receipt for the transfer of money.
Responsibility
If the car is taken on credit, and the debt to the bank has not yet been repaid, the sale procedure will take a long period of time. The owner of the vehicle must obtain the permission of the bank without fail.
If a person decides to go the other way and sells the car without notifying the credit institution, he will be held liable. An individual is forced to pay a fine in the amount of up to 120,000 rubles or imprisoned for a period of 2 years.
The severity of punishment is determined by the court depending on the situation. Practice shows that citizens who arbitrarily sold a car for which a loan was not paid, get off with a fine. However, there are times when a person is deprived of liberty.
In addition to problems with the bank, a person may have trouble with insurance companies. They regard the sale of cars without notification and obtaining permission as unjust enrichment and illegal use of other people's money. To avoid possible problems, you should not cross the line of the law.
