Selling your financed car in the UAE
Everything you need to know about selling a car on finance
Selling your financed car in the UAE can often be problematic. If your car is financed by a bank, selling a financed car still under loan can be tricky. This is because if the loan isn’t fully settled, the car is technically still mortgaged and therefore owned by the bank. However, if you do wish to sell your financed car in the UAE, there are some ways around it.
Selling a car on finance
If your vehicle is still on loan and mortgaged to the bank, you have two options if you wish to sell your car before the loan is up. Your first option is to find a buyer who is also wanting to finance the car and willing to use the same bank of which the finance has been taken out with. Or alternatively, your second option is to find a buyer who is willing to close the loan for you, by the paying the remainder in cash.
Selling your financed car to another finance buyer
If you find another finance buyer, you will need to follow the following steps:
- You will need to contact your bank and agree with them that they will finance the new buyer too. However, not all banks in the UAE will permit this. So you will need to speak to the individual bank to discover their policy on transferring finance.
- The next step is to ask the new buyer to apply for finance with the same bank and get approval. The buyer will then need to provide a valuation certificate, which will prove the value of the car matches the loan amount.
- You will then need to settle your existing loan with the bank. You may need to close any outstanding balance you may have, including any early settlement fees.
- Now you’ll need transfer ownership of the car to the new buyer with the RTA and Tasjeel.
- The last step is to make sure the new buyer provides the bank with the new registration card as proof of ownership. As well as a copy of the comprehensive insurance for the for the financed value of the car to close the loan.
Selling your financed car to a cash buyer
If you find a cash buyer, you will need to follow the following steps:
- Firstly, you will need to contact your bank to discover the remaining loan amount and any early settlement fees that may come with ending the loan before its full tenure.
- Next you will need to sign a “Seller’s agreement” or "Power of Attorney". These documents will give the buyer the power to transfer the car to their name, as soon as the loan is cleared.
- Once you have signed the document, you should ask the new buyer to meet you at the bank with the money. It is recommended they pay in cash for the value of the car, to avoid the issue of cheques bouncing. Once at the bank, the new buyer can hand over the relevant amount to clear the loan. However, at this point you should still be aware that the car is still under your name, making you liable for any accidents or fines until the point the car gets transferred into the new buyer’s name.
- The buyer can now take home the car. However, the new buyer will need to go to the RTA once the bank electronically informs the RTA that the car is no longer under loan. This process typically requires a few working days.