Buying a car through bank financing might seem like a good option but things can get really complex once you want to sell your car that is bank financed in the UAE. As you can’t simply transfer it to the buyer without paying off your loan, it can be a tricky situation. Until you have settled your debt in full, the financed car remains under bank mortgage and the bank still has ownership of the car. CarSwitch.com guide you on how you can sell your financed car in the UAE.
Let’s suppose, you need to urgently sell your car but don’t have the money to settle the loan. You can either:
Find a buyer who is willing to clear your loan. In this case, you will need to provide a guarantee to the buyer to ensure that the transfer of ownership of the vehicle will be done once the payment is made. In order to do that, you will have to:
- Get full information of the total amount you owe the bank including any fees for the early settlement of the car loan.
- Provide the buyer with either a “Seller’s agreement” or a “Power of Attorney” so that once the loan is cleared, the buyer can easily transfer the ownership of your car. You can get these documents from either a notary public or registered provider of “Seller’s agreement”. To keep our buyers and sellers safe, we at CarSwitch.com give preference to the “Seller’s agreement” as it can’t be invalidated once the payment is made.
- Once the buyer is convinced, you can ask them to come to the bank with you for the loan payment. Cash or managers cheque are both a good payment option although personal cheques can be risky as they might bounce. Then, the buyer can make the payment. However, the car is still under your ownership and you are accountable for any accidents, damage or fine.
- Most of the work is done at this point and the buyer can use your car now. Though, for the transfer of ownership the buyer will need to go to the RTA after the bank informs them that the debt against it has been settled which typically takes a couple of days.
Or: Search for a buyer who is willing to buy the car on finance.
- In this scenario,the buyer has to agree to get the loan via the same bank as yours. As some banks might not allow this, it’s better to have prior information. CarSwitch.com has already worked with Emirates NBD, Dubai Islamic Bank among a few others.
- Once your bank grants permission, the buyer needs to present a car valuation certificate as proof of the value of the car against the loan amount.
- Request the bank to settle your owed amount along with any early settlement amount.
- Now, you can transfer the car to the new buyer through RTA/Tasjeel.
- To prove the transfer of ownership and close the loan, the new buyer provides the bank with the new registration card along with insurance papers covering the financed value of the car.
Whether you are planning to buy or sell your car, it can be a difficult process. This is why, we at CarSwitch.com provide transparent information to our buyers and sellers as well as guide them in this process.