Sure you can! But it’s more complicated than selling a car you actually own – which is already a tricky and time-consuming task. There are plenty of good reasons why you might want to sell your car before the end of your loan term: your family has grown (or shrunk), so you need more (or less) seating room for passengers and storage room for stuff; you’re moving house and no longer need your own wheels; you got a raise (or took a pay cut), so you want to splurge or need to economise.
Can I Sell My Financed Car by Myself?
You can certainly handle the entire process yourself. Or you can save yourself a lot of time and hassle by seeking guidance from the auto loan experts at Laneway Auto Loans and Sales. In their considerable experience, there are three ways of selling a financed car in Canada:
- A private sale means you’ll be organising minor repairs and touch-up’s, preparing and placing your ads, handling your own marketing, particularly responses and follow-ups, talking to and then meeting up with potential buyers, sitting through test drives, bargaining over the closing price, and running the risk of fraud. Another pain point is that most buyers want a straightforward deal with a clear title, so you need to pay off the lender in full before getting paid, in order to lift the lien securing your loan.
- An online retailer offers the major advantage of trading in your current wheels, which streamlines the entire process loan settlement step, as all the paperwork can be handled simultaneously with the purchase documentation for your next car. These businesses are essentially virtual dealerships with no real-life showrooms, handling every step online. They’re hard to beat for convenience, making an offer for your current vehicle, based on the details you provide through completing an online form. If you close the deal, they’ll pick up your car, pay off the balance of your loan to the lender, and credit you with the balance, either in your bank account or as a deposit on another vehicle.
- A traditional dealership will probably accept your finance vehicle as a trade-in, assessing its value. You should always make sure you’re getting a fair valuation. This is an important step, because brick-and-mortar dealerships often factor in the costs of reconditioning your car prior to reselling it. If you accept this offer, it will be credited towards the price of your next car, with your outstanding loan balance built into your subsequent car loan.
When Should I Sell My Financed Vehicle?
Selling a car to which you don’t hold clear title could certainly take a considerable amount of time and effort. One of the best ways of deciding whether to go ahead with this complex process is to define whether you hold positive or negative equity in your asset. This is a simple three-step process that you can calculate yourself in just a few minutes:
- Ask your lender for a detailed payoff statement, which shows the outstanding balance of your auto loan, and how much it will cost you to obtain full ownership;
- Find out the fair market value of your vehicle, by checking with reputable sources like the CARFAX Value Range Estimator, Kelley’s Blue Book, and the Canadian Black Book;
- compare these two figures: if the balance is positive, you’ve built up equity in your vehicle; if it’s negative, your loan is underwater, and you owe more than your vehicle is worth.
Takeaway: If you’re not sure about selling your financed vehicle, you can get personalised advice from the professionals at Laneway Auto Loans.