What can I do if I owe more on my car than it's worth?
Can I sell my car if I owe more than it worth?
What that means, however, is that it's possible to owe more on your car than what it's worth. Because there's a lien against your car until it's paid off, it's very difficult to sell it privately unless you can pay off the balance on your own.
What happens if you owe more than trade in value?
If the amount owed on your car loan is higher than your vehicle's estimated value, the difference between the two is negative equity. For example, if you owe $9,000 on your car loan and your vehicle has an estimated value of $6,000, you currently have $3,000 of negative equity.
How do I sell my car if I still owe on it?
Can I trade in my financed car?
Yes, you can trade in a financed car, but the balance of your loan doesn't just disappear when you do so — it still has to be paid off. In most cases, the loan balance should be covered by the trade-in value of the vehicle, but that will depend on a variety of factors, including condition and age.
Related guide for What Can I Do If I Owe More On My Car Than It's Worth?
Is it worth selling your car to a dealership?
If you're thinking “Should I sell my car to a dealer?”, it's worth pointing out that many people find selling a car to a dealer the easiest option; however the convenience will cost you. You'll get less money for your car in order to avoid all the hassles involved in actually finding it a new owner.
What happens if I've bought a car with outstanding finance?
If there is outstanding finance on a vehicle you recently purchased, then it is likely that the finance company will ask you to pay the outstanding amount or impound your car as you do not actually own the vehicle, even though you paid for it.
What happens if I buy a car still under finance?
Regardless of who owns it, if the car still has money owing on it, the car is still the security. That means the owner (you, if you decide to buy it) is not personally liable. That being said, if the money owing on the car is not repaid, it can be repossessed and you won't be compensated2.
What happens if I use my car as collateral?
Loans using cars as collateral tend to have a lower interest rate. If a car has been put up as collateral and the loan is not paid, the bank will repossess the car and sell it to pay off the loan. Because the loan is guaranteed by the collateral, the interest rate is often less than an unsecured loan.