Paying Off Car Loan

tmccar

I would like to sell my car, but continue paying off the loan. The reason is that I really need the money. Is it possible to do this, or is it legally wrong?

Tom

Atlantic Dawn

What kind of loan did you get to start with? Was it a personal loan or one secured on the car?

tmccar

Atlantic Dawn wrote: »

What kind of loan did you get to start with? Was it a personal loan or one secured on the car?

It was with Mazda Finance, so I guess it's secured on the car.

tom

Yawns

If it was a personal loan from a bank you would be ok to sell the car and still pay the loan as your contract is with you and the bank. If you have a hire purchase agreement with a finance company on the car then you would need to clear the loan amount in full before the other person can legally own the car.

If its the HP agreement, then when you sell the car, the new owner could pay the remaining money on the car and give you what's left over. This obviously only works where the price of the car is higher than what's left owed on the HP agreement.

Yawns

If you don't mind us asking how much is left on the finance agreement? And how much are you selling it for?

tmccar

There's about €17,500 left on the loan and I'm selling it for €17000- €18000


Tom

Yawns

meh might not be worth it. Unless you get the 18k. But even then you will only have 500 left as the other 17.5k must be paid to the finance company. Otherwise if the buyer buys your car and you stop making the payments then the finance company repos the car from new buyer as it's not his car.

tmccar

OK, so I have the option of doing it? I do intend to make the payments, of course.

Absurdum

tmccar wrote: »

OK, so I have the option of doing it? I do intend to make the payments, of course.

A credit union loan would be the best option imo, pay off the car finance then sell it for whatever. You can then either pay back the credit union or use the money for whatever you want. A personal loan from a bank would probably be trickier to get as they wouldn't be too keen on loaning money for this purpose. I personally wouldn't touch a car that had finance outstanding no matter what the seller was planning to do.

tmccar

I am the seller! I'm hoping to sell the car, and continue making the payments, if that is allowed.

Piratez

Not allowed because if you sell the car you have to clear any outstanding finance on it.

Another option for you but maybe it does not apply. Ive heard that once you have 50% or more of the car finance paid off that you can return the car to the finance company.

This only applies to hire purchase agreements only as far as I know.

Absurdum

tmccar wrote: »

I am the seller! I'm hoping to sell the car, and continue making the payments, if that is allowed.

I know! You can't sell the car as you don't actually own it until the final payment is made.

Yawns

You won't really sell the care tho to be honest!

Anyone with common sense will walk away. What happens 6 months after you sold it that you get fed up and just stop paying, the finance company takes back the car.

You don't own the car yet anyway! Until the last payment is made then the finance company owns the car. The only way around this to sell it is for the new buyer to pay the finance company themselves.

What I was saying to you was that if someone agrees to buy your car for 18k they will make the payment of 17.5k to Mazda Finance and you will only recieve €500. That way the finance company has been paid and the new seller legally owns the car.

For Forks Sake

tmccar wrote: »

I am the seller! I'm hoping to sell the car, and continue making the payments, if that is allowed.

You'll be hard pushed to sell the car, as any potential buyer who does a hstory check on the car will see finance owing and steer clear

Final Approach

You can do it no problem if it is a regular bank or credit union loan. I did it myself a few years ago. Sold an Audi A4 for €28'000 and didn't pay off the loan for a while later.

Gumbo

tmccar wrote: »

OK, so I have the option of doing it? I do intend to make the payments, of course.

tmccar wrote: »

I am the seller! I'm hoping to sell the car, and continue making the payments, if that is allowed.

no you cant im afraid.
the buyer will spot the finance and wont buy the car until either of the following 2 options :

1. you pay off the finance and get a letter confirming it.
2. you get a settlement letter and the buyer pays the finance off himself and gives the balance if any to you.

in either case nobody in their right mind will buy the car from you in the hope that you continue the payments.

mickdw

The OP needs to check what the finance deal was. If it is secured on the car, then, he cannot sell it without clearing the loan.
On the other hand if it is a bank loan, there is a possibility that its not secured & therefore the car is not related to the deal in any way. You can in that case freely sell the car. It will never have had finance registered against it & nobody will ever be able to repossess it even if you stopped paying.

So find out whether its secured or not.
I have never had a secured car loan. In the good times, the majority of loans given direct from bank were personal loans not secured on the car even though they would often be called motorloans etc. On the other hand, all dealer finance would be secured.

chris85

OP since its a finance agreement secured on the car its not your car to sell until loan cleared, the finance company legally own it so would be illegal to sell it on without the finance company's permission.