Planning on selling your car in the UAE but it still has payments left? Learn how to with our handy guide.
16 March 2020| Last updated on 17 March 2020
Let's take a look at how you can sell your car in Dubai or Abu Dhabi even if it has payments left on the loan.
So you go through the steps to finance your dream car, and maybe even upgrade or customise it for the long haul. Then, life happens - your work takes you out of the country, you want to return to public transport, or you just fall in love with another car. Putting your car up for sale just seems like the next best decision.
But if the chances are that your current loan isn't fully paid off when the time comes to put your car on the market, are you stuck where you are until you've returned every last dirham?
Rest assured, absolutely not.
It may feel intimidating at first to sell a car in the UAE if you still owe money on it, but you have several options for a successful purchase.
Find out your payoff amount
If you are still paying off your loan, contact your provider in the UAE to discover exactly how much you're required to pay off your outstanding amount as well as any early settlement fees.
Your payoff amount should also include the interest you own until the loan is completely paid off, as well as other unpaid fees.
You will need to find out exactly how much it is before you begin transferring ownership to a new driver.
Pay off the loan
If possible, pay off the loan before selling the car so that you can simply sign over the vehicle to the buyer. Some buyers may be hesitant to purchase a car that hasn't been paid off yet, and a car with a clear title is usually more attractive in the market.
Once you've paid it off, you can request for an official release letter from your bank and check with RTA to confirm that the loan is complete.
Find a buyer who will take the loan
If you're unable to pay off your loan at the moment, find a buyer who is interested enough in your car that they are willing to pay for its remaining loan. They must also either currently be using or are willing to use the same bank that the car is under loan to.
Once you have found a potential buyer, follow the steps below:
- 1. Inform your loan provider that you have someone who is willing to finance the car's outstanding amounts and have the loan transferred to the buyer. It's worth noting that not every bank in the UAE permits this, so you must speak with your bank to check whether this is an option.
- 2. The buyer must then apply for a loan with the same bank and get approval.
- 3. The potential new owner of your car will be required to provide a car valuation certificate, to prove that the value of the car matches the loan amount. This can be done at RTA in Dubai or Tasjeel in Abu Dhabi.
- 4. You must then close your existing car loan with the bank, as well as any early settlement fees that can occur.
- 5. Transfer official ownership of the car to the potential buyer through either RTA or Tasjeel.
- 6. To properly close the loan, the buyer must provide the bank with the new car registration card as proof of their ownership and a copy of its comprehensive car insurance policy.
Find a buyer who will pay by cash
If you find a cash buyer, you will need to follow the steps below:
- Sign a "Seller's Agreement" or "Power of Attorney" as these documents will provide the buyer the power to transfer the car to their name. This is effective once the loan is cleared, so until it's been paid off you are still responsible for any traffic fines or accidents the car might experience.
- When the document is signed, request the buyer to meet you at the bank with the cash.
- At the bank, the new buyer must hand over the money to clear the existing loan.
- The buyer must inform RTA or Tasjeel that the car is no longer financed by the bank. Note that this will take a few days.
Once these steps are done, the car will then be completed owned by the buyer. The whole process will require patience, as finding the right buyer can get time-consuming and lead to delays.
To make the process easier, Dubai-based automotive professionals Expat Motors offers a "drive in, walk out" service that will help you sell your car in as little as 30 minutes.
Click "contact" below to get in touch with one of Expat Motors' experts!