How to Sell a Car Under Finance in Australia

Selling a car under finance in Australia can seem like navigating a maze of legalities and uncertainties. But fear not! With the proper guidance and understanding, you can successfully sell your financed car without breaking a sweat. We’ll walk you through the step-by-step process, covering everything from legal considerations to practical tips on preparing your car for sale.

How to Sell a Car

Understanding Your Obligations

Before diving into the selling process, it’s crucial to understand what it means to sell a car under finance. When you finance a vehicle, you essentially take out a loan to purchase it. Until the loan is fully paid off, the lender retains an interest in the car, known as a lien or encumbrance. This means you can only sell the car after dealing with the outstanding loan first.

Legal Requirements

When selling a financed car, honesty is the best policy. It’s not only a matter of ethics but also a legal requirement to disclose the vehicle’s financial obligations to potential buyers. Failure to do so could lead to legal repercussions down the track.

Under Australian law, sellers must inform buyers if money is owed on the car before the sale is finalised. This ensures transparency and protects both parties from any unexpected surprises. Failing to disclose this information could result in disputes and even legal action.

Step-by-Step Selling Guide

Now that you understand your obligations let’s dive into the step-by-step process of selling a car under finance.

  1. Contact Your Lender: The first step is to contact your lender to discuss your intention to sell the car. They will provide details on how to proceed and any requirements they may have.
  2. Determine Payoff Amount: Your lender will provide you with the payoff amount, which is the total amount you need to pay to clear the loan and release the lien on the car. This amount may include the remaining principal balance plus any accrued interest or fees.
  3. Evaluate Your Options: Once you have the payoff amount, consider your options for clearing the finance. You can use savings to pay off the loan, refinance the car with a new lender, or trade it in for another vehicle through a dealership.
  4. Prepare Your Car for Sale: Before listing your car for sale, take the time to clean it thoroughly inside and out. Consider getting any necessary repairs done to ensure it’s in good condition. Take high-quality photos and gather all relevant paperwork, including service records and the vehicle’s registration.
  5. Advertise Your Car: Choose the right advertising platforms to reach potential buyers. Consider listing your car online on websites such as Gumtree or in local classifieds.
  6. Negotiate the Sale: Once you find a potential buyer, negotiate the sale price and terms. Be upfront about the outstanding finance on the car and ensure the buyer is aware of their responsibilities.
  7. Finalise the Sale: Once you’ve agreed on a price, complete the necessary work—transferring ownership of the car, paying off the loan, and releasing the lien on the vehicle.

Or, for a faster and hassle-free process, contact  Carbuyers.


Preparing Your Car for Sale

First impressions count when selling a car, so presenting your vehicle in the best possible light is essential. Here are some tips for preparing your car for sale:

  • Clean Inside and Out: Give your car a thorough wash and vacuum to remove dirt or debris. For added appeal, consider getting it professionally detailed.
  • Fix Minor Issues: Address minor issues such as dents, scratches, or broken accessories to improve the car’s appearance.
  • Take High-Quality Photos: Capture clear, well-lit photos of your car from multiple angles to showcase its features.
  • Organise Paperwork: Gather all relevant paperwork, including service records, registration documents, and warranty information.


You can successfully navigate the process of selling a car under finance by understanding your obligations, following legal requirements, and taking the necessary steps. Remember to be transparent with potential buyers, prepare your car for sale, and consult with your lender or financial advisor before making any decisions regarding your financed vehicle. With a little effort and diligence, you’ll be on your way to selling your financed car confidently.

If you’re looking for more advice on selling cars under finance or need assistance finding a buyer for your vehicle, contact us at Car Buyers today! We’re here to help make this process as smooth as possible. 


Can I legally sell my car while it’s still under finance?

Yes, you can sell a car under finance in Australia, but you must first pay off the outstanding loan to release the lien on the vehicle.

Can I sell a financed car privately?

Yes, you can sell a financed car privately, but you must inform potential buyers of the outstanding finance on the vehicle.

What happens if I sell a car with outstanding finance?

Selling a car with outstanding finance without disclosing it to the buyer is illegal and can lead to legal consequences.

How can I assure my buyer about clearing finance?

Provide them with documentation from your lender that shows arrangements made for clearing any dues upon receiving their payment.


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