Last year Thomas bought a nice three-door Audi A1. He opted for this small city because it consumes almost nothing and parks everywhere. To finance it, he contracted a loan of € 22,000 to be repaid over 5 years. However, he is currently facing big changes in his life and wants to move to another model. Indeed, he and his wife are expecting a child and a three-door car is not that convenient.
He wants to buy a bigger car that is better adapted to their new needs. But is Thomas allowed to sell his car still under credit when it is almost new? In addition, he has a car loan in progress and he still has to repay 48 monthly payments (ie 4 years)? The answer will depend on the type of credit he contracted a year ago.
Choice of personal loan
But why? And this type of credit is not affected, which means that it is not intended for finance a particular product. He was not forced to provide a purchase order or any other proof of purchase. Therefore, he received the sum requested at one time, allowing him to use it as he saw fit: the car is therefore his full property and he can sell it without worry. On the other hand, since the bank has no money back guarantees or pledges. Indeed, the rates for a personal loan vary between 4.95% and 10% in Belgium.
He sends a registered letter to his bank for at least 10 days before his next monthly payment (note: these conditions vary from one organization to another). On the other hand, he must know that he could have an indemnity to pay.
Choosing the auto loan
Here, the answer is not so simple. Indeed, since the car loan is an assigned loan (the loan is requested for the purpose of buying a vehicle), each agency sets its conditions. For this type of credit, Thomas had to provide the purchase invoice or purchase order to prove the use of the amount that would be allocated to him.
Financial institutions may request that the vehicle be used as a guarantee
In addition, financial institutions may request that the vehicle be used as a guarantee in the event of non-payment. This makes the sale very difficult since the bank remains owner until the loan has been repaid in full. But this is sometimes negotiable if the sale allows for the full refund of the vehicle.
So you have understood: selling your car still under credit is possible but it is essential to weigh the pros and cons of each decision and study the various options available to you. To you the car of your dreams! And if you want to finance it via credit, you can simulate all offers on Good Finance.