Selling a vehicle that is still on loan can be difficult unless the mortgage amount is completely settled by the bank. However, it isn’t entirely impossible. For one reason or another, people often have to sell their car before the loan is paid off. There are certain options you can consider in such a scenario.
This guide will help you understand how to sell a car with a loan. Considering your situation, you can pick the option that best suits you.
Ways to Sell a Car with Loan in Dubai
If for any reason you need to sell your car before your auto loan is paid off, here are a few ways to do that in Dubai.
Pay the Loan
Those who can afford to clear the car loan in Dubai can easily sell a car by paying the remaining amount. Once you have cleared the balance, do the following things:
- First of all, make sure that your bank must electronically notify the RTA about the clearance of your loan. Keep in mind that it can take a few working days to complete the procedure.
- Also, don’t forget to request your bank to release an official letter of your record. It is a very crucial step that not many car owners are aware of it.
Look For a Finance Buyer
If you can afford to clear the balance, follow the aforementioned steps. However, if you cannot clear the debt, then there are two ways you can opt to sell your loan car in Dubai.
- Find a buyer who wants to purchase your car via bank loan and is willing to choose the same bank under which your car is on the mortgage.
- If you manage to find a finance buyer for your vehicle, then you must inform the bank so that they will transfer the loan to the buyer. Besides Emirates NBD, Noor Bank and Dubai Islamic Bank, no other banks in the UAE offer a loan transfer policy. Therefore, you must check the bank’s policy and evaluate if this option is feasible for you.
- Once you are done with the loan transfer process, ask the buyer to apply for a loan application and get it approved by your bank.
- The bank will need a car valuation certificate to prove if the car’s value justifies the new loan amount.
- If the buyer has agreed on a selling price that is different from your outstanding debt amount, then you must ask your bank to settle it by using the buyer’s loan. The remaining balance could include an early settlement fee usually 1% of the loan amount.
- Now you must transfer the ownership of the vehicle to the new buyer by going to an RTA or Tasjeel centre.
- Lastly, ask the buyer to provide the new registration card to the bank along with a copy of the comprehensive insurance. Both things are required as proof of ownership and to close the loan respectively.
Find a Cash Buyer
Another option for selling a financed car could be to find a cash buyer who is willing to pay the loan to the bank on your behalf. However, you must assure the buyer that they will get ownership of the vehicle after clearing the outstanding loan amount. To do this, you will need to:
- Ask the bank about the remaining loan amount and any early settlement fees for closing the loan before completing a full tenure.
- Sign a Power of Attorney or seller’s agreement to give the new buyer the right to transfer the car to their name after clearing the bank loan.
- You must go with a buyer at the bank with cash or a certified manager’s cheque of the car’s value. At the bank, the buyer can pay the outstanding amount to clear the loan.
- To complete the transfer procedure, the buyer is required to visit the RTA once the bank electronically informs the RTA about the loan clearance.
Go for an Auto-Loan Pay-out
Last but not the least, another option for selling a car under finance in Dubai is an auto-loan pay-out. Emirates NBD partnered with dubizzle Cars to offer a convenient auto financing option ‘AUTOSWAP’ in Dubai. It enables sellers to sell their financed cars in Dubai without having to settle their existing loans. With the help of this feature, the buyer gets a new loan to finance this purchase. Moreover, Emirates NBD customers can avail free listings and evaluation services with dubizzle Cars.
Here is how you can use AUTOSWAP:
- Visit the Emirates NBD website
- Select Personal Banking, choose Auto Loans, and then click on AUTOSWAP
- Enter your name, email address and contact details
- Mention the age of the car
- Apply
The dedicated staff will get in touch with you once you fill out the online form. Also, the interest rate of this loan service starts from 2.99%, while the loan amount is up to 80% of the vehicle valuation. Here are some useful tips to sell a car online in the UAE.
Things to Consider Before Selling a Car with a Loan in Dubai
- The car under bank finances can only be sold unless the balance is settled by using the methods mentioned above.
- The seller must complete the car test to ensure that the vehicle meets all the standards and is fully functional. The vehicle testing fee in Dubai is AED 150. For more details, you can check our guides on vehicle testing centres in Dubai and all about RTA vehicle tests.
- Once you clear the vehicle test, the RTA will issue a clearance certificate.
Here are some more tips to sell a car. These tips can help you to know how to prepare your vehicle for sale.
The Documents Required For the Buyer
The buyer must have the following documents:
- Valid insurance for the car
- Passport with residence visa
- Emirates ID
- UAE driving license
This concludes our guide on how to sell a car with a loan in Dubai. If you are selling a car first time in the UAE make sure you know all the ways of selling it. Besides, potential buyers interested in buying a vehicle without a loan can buy used cars in Dubai from dubizzle. From luxurious used Mercedes Benz and BMWs for sale to affordable second-hand Nissans, you can find a sought-after variety of used vehicles here. Once you buy a vehicle, don’t forget to be informed about the traffic fines in Dubai.
Stay tuned to the UAE’s top auto blog for more information about the car industry.
Related Posts
