It becomes a hard and time-consuming process to sell a car in the UAE when a person is unaware of the technical procedure, especially when the bank finances the car. Until the EMI of the loan is fully completed, the car is considered to be under the bank’s control.
If you are considering selling a car that is still being financed, there are certain steps you need to follow to ensure that the transaction goes smoothly and legally. In this article, we will discuss the process of selling a bank-financed car in the UAE in detail.
Check with the bank:
The first step in selling a bank-financed car in the UAE is to check with your bank. You need to find out how much you owe on the car loan, the outstanding balance, and whether there are any penalties or fees for early repayment of the loan. You will also need to inform the bank that you plan to sell the car and ask them for the necessary documentation.
Get a valuation of the car:
Before you put your car up for sale, getting a valuation is a good idea. This will help you determine the market value of the car and how much you should expect to get for it. You can get a valuation from a reputable car dealership or use online valuation tools.
Suppose that if I want to sell my Bank Financed car in Dubai, I have to follow all the legal processes and try to find a buyer who can support me in paying my loans. However, if you still want to sell your car, there are three ways to achieve this goal.
1) Pay the Loan Yourself
You can easily sell a car if you can afford to pay off the loan. As it’s fast to transfer fully paid cars, which saves buyer time and it increases your car’s value.
Once you have paid off the balance, do the following things:
First, ensure your bank electronically notifies the RTA that your loan has been paid. Depending on the bank, the process may take 2 to 3 working days.
Also, do not forget to ask your bank to issue a release letter as proof of loan clearance. Then you can transfer the car easily.
2) Find a buyer who can buy a financed car
To sell a car, in Dubai you have to follow procedures to avoid any confusion. You can try to search for a buyer who agrees to finance the car and uses the same bank at which the car is presently under the mortgage.
A) Firstly, you should contact your bank from which you have financed the car and convince them that they will also agree to finance the new buyer.
B) Secondly, you have to make the new buyer follow the process, apply for the loan in the same bank, and get it approved. After that, a valuation certification will be provided to the bank, proving that the vehicle’s value justifies the new loan amount. If the buyer has agreed on a sale price that differs from your remaining debt, you will need to ask your bank to settle it with the buyer’s loan.
C) Now, after this, you will settle your existing loan, which you have taken from the bank, and clear any outstanding balance, including the early settlement fees.
D) In this step, you will transfer your vehicle ownership to the new buyer you have chosen.
E) At last, you have to cross-check that the new buyer has given the new registration card of the ownership of the car to the bank so they can close the loan.
3) Chose a buyer who can close the loan
To avoid the whole confusion, it is a better option to select a buyer who has the potential as well as the will to close down the loan by paying the whole amount on your behalf. When you sell your old car this way, you must keep certain points in mind.
A) First, you must get information from the bank regarding your remaining loan amount, along with any early settlement fees.
B) Secondly, you will have to sign a ” Seller’s Agreement” or ” Power of Attorney,” which will help you to transfer the authority over the car from your side to the new buyer’s.
C) After that, you have to ask the buyer to meet you at the bank with cash to settle the loan. This is to avoid the chances of fraud.
D) At last, this new buyer can take the car with him, but before that, he has to go through the RTA to certify that the car is loan-free. When a loan is paid bank will inform the RTA about the loan payment. Now the car can be transferred to the new owner.
In conclusion, selling a bank-financed car in the UAE requires careful planning and attention to detail. You need to work with the bank to understand the outstanding balance on the car loan and any fees or penalties associated with the sale. You also need to find a buyer who is serious about buying the car and complete the necessary paperwork to transfer ownership of the car and the car registration. By following these steps, you can ensure that the transaction is legal and you get a fair price for your car.