Are you planning to sell your current car, but feeling hindered by an existing loan on it? Read this article to understand how to sell a vehicle with an existing loan.
Most of us resort to financing for buying cars. But, indeed, the majority of us do not plan to sell off the vehicle in the near future. However, sometimes you might need to sell your car even before the loan taken out for it has been repaid in full. How does one go about it?
The process might be cumbersome and require a lot of paperwork, but it is possible! This article elaborates on the steps to sell a financed car!
The Two Significant Steps
You’ll be delighted to learn that you can sell your financed car in less than two steps. The first step is to get clearance of car loan with the bank and procure a NOC and Form 35. The next step is to fill out and submit all the required documents to get through the sale.
When you purchase any vehicle on loan, the car’s RC will consist of a term called “HP.” HP stands for hypothecation, which indicates that your car’s ownership lies with the bank. If you want to sell your financed car, you need to contact the bank to remove HP.
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Steps to Remove Hypothecation
Regardless of whether the loan is pending or cleared off, you require the bank to remove the hypothecation. Here are the steps to do the same:
- Visit the Bank: Whether the dues are clear or not, you have to visit the bank to remove the HP. To remove the HP, you need to make a visit to the bank that financed the car to get a loan foreclosure.
- Clear the Dues and Procure Form 35 and NOC: You must pay the remaining dues as per the foreclosure document. Next, the bank will send you a NOC and Form 35 to your registered address.
- Submit the Documents Needed to Sell Vehicle: After getting the NOC and form 35 from the bank, you need to fill rest of the forms. The process requires certain other documents that you’ll need to submit to go through the sale.
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Documents Needed to Sell a Financed Car
Are you wondering about the documents required to make this sale go through? There are a dozen of papers that you’ll need to furnish to make this sale successful. Here’s a complete list:
- Individual Documents: PAN card, address proof, passport size photograph
- RTO Documents: Form 28, Form 29, Form 30, Form 35 and NOC, sale affidavit, clearance certificate
- Car Documents: RC, PUC, insurance, application of insurance transfer, invoice of car purchase, ownership manual, duplicate car keys
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Selling a financed car isn’t easy, but it is not impossible. We wish you luck for the rest of the process!
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