Selling a Car That’s Under Bank Financing in UAE

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Not many UAE residents are aware how problematic it can be trying to sell a financed vehicle and only discover it the hard way. If you have a car that is financed by the bank, selling your car before the end of the loan tenure can be tricky business. Unless the loan amount is fully settled, the car is mortgaged to the bank and technically still under their ownership so you cannot finalize the sale. But there are ways around it.

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If your car is still mortgaged to the bank and you are unable to pay off the loan, there are only two ways to sell the car. (1) You find a buyer also wanting to finance the car and willing to use the same bank the car is currently under loan to. (2) You secure a buyer willing to close the loan on your behalf by paying in cash.

(1) In the event you find a finance buyer, you will need to:

  • Agree with your bank that your buyer will use the same bank to finance the car. Unfortunately, not all banks in the UAE allow this, though here at have been successful with Emirates NBD, and Dubai Islamic Bank, amongst others.
  • Ask the buyer to apply, and get approval, for a loan from your same bank and provide a valuation certificate proving the value of the car justifies the loan amount.
  • Ask the bank to settle your existing loan requiring you to close any outstanding balance (including any early settlement fees).
  • Transfer ownership of the car to the new buyer at the RTA / Tasjeel.
  • Ask the buyer to provide the bank with the new registration card as proof of ownership and a copy of comprehensive insurance for the financed value of the car to close the loan.

(2) In the event you secure a cash buyer willing to close the loan on your behalf, you will, of course, need to provide the buyer assurance that they will indeed get ownership of the car after payment. To do this, you will need to:

  • Find out from your bank the remaining loan amount and any early settlement fees associated with closing the loan before its full tenure.
  • Sign a “Seller’s agreement” or “Power of Attorney” that would give the buyer power to transfer the car to his / her name once the loan is cleared. These documents can be secured through a Notary Public or an authorized supplier of “Seller’s agreements”. At, we prefer “Seller’s agreements” as they cannot be nullified after payment, and so that is what we generally secure for our sellers and buyers.
  • Ask the buyer to meet you at the bank with the money, preferably in the form of cash or certified manager’s cheque (generally do not accept a personal cheque as that could bounce) for the value of the car. At the bank, the buyer can hand over the relevant amount to the bank to clear the loan. Since the car is still under your name at this point, you are liable in case the car gets into an accident or incurs fines before it is transferred to the buyer’s name.
  • The buyer can take the car home at this point. To complete the transfer of ownership, however, they will be required to go to the RTA once the bank electronically informs the RTA that the car is no longer under mortgage (typically requires a few working days).

Sounds complicated or risky? It is. That’s why here at, we hand hold our customers through every step of the selling process. Be safe when selling your car!

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