How easy is it to sell a financed car? Before we jump straight into answering it, please allow us to elaborate the importance of this topic in the times we live in! The Indian automotive market has expanded rapidly over the years with different car dealerships fighting it out to move their models out of the showrooms, which has now simplified the process of getting hold of a new car. With attractive finance schemes on offer, the majority of the customers opt for financed cars with customized monthly payments (EMIs), rather than spending a bulk amount upfront.
Another trend noticed recently is that most of the buyers tend to upgrade their cars after it finishes three years, making way for a more contemporary offering. This leads us right back to the initial question of how easy is it to sell a financed car? The answer would be that it is cumbersome as the process is lengthy and consumes a lot of your valuable time. You might ask – why so? Simply because it involves a lot of paperwork in selling a financed car.
We have tried to break down the steps involved in selling a financed car, just to try and simplify the process for you.
The first being the clearance of your car loan with the bank and getting your hands on an NOC (no-objection certificate) along with two copies of Form 35.
Secondly, once you receive the NOC and Form 35, it would be required of you to fill and submit all the other documents to sell a financed car.
When you purchase a car on loan, your car’s RC (registration certificate) contains a term called “HP”. HP stands for hypothecation which signifies that your car’s ownership lies with the bank. However, many people do not get HP removed from their RC, even after clearing the loan. In order to sell your car, the same is required.
In both the cases – where the loan amount is still pending or has been cleared, you need to get the HP removed from the RC in order to sell a financed car. To do that, visit the bank (who had approved your loan) to get the loan foreclosure documents, specifying the amount of loan pending.
Clear the dues as per the loan foreclosure documents and you will receive the NOC along with two copies of Form 35 which is usually sent to your registered address. However, if you wish to procure the documents yourself, you can so by visiting the concerned bank.
After receiving the NOC and Form 35, collect all the other documents that are required to sell a car and submit them to complete the process.
Apart from the NOC and two copies of FORM 35, the documents required to sell a financed car are same as those required while selling a non financed car.
Here’s a quick preview of the documents that are needed to sell a car:
|INDIVIDUAL DOCUMENTS REQUIRED TO SELL A FINANCED CAR|
|PAN Card||One Self-Attested Copy|
|Address Proof||One Self-Attested Copy|
|Passport Size Photographs||Two Self-Attested Copies|
|RTO DOCUMENTS REQUIRED TO SELL A FINANCED CAR|
|Form 28||Three Copies With Chassis Imprint|
|Form 29||Two Copies|
|Form 30||Two Copies|
|Form 35 and NOC||One Copy With Bank Stamp On Form 35|
|Sale Affidavit||One Copy|
|Clearance Certificate||One Copy|
|CAR DOCUMENTS REQUIRED TO SELL A FINANCED CAR|
|Application Of Insurance Transfer||Only required if insurance is to be transferred to the buyer|
|Invoice Of The Car||Only required if there is mismatch in the RC details|
|Duplicate Car Keys||–|
To have a detailed overview of all the documents, check out our blog on “What are the documents required to sell car”.
That said, the three-step process to remove hypothecation might look easy, however, it is far cry from that. Again, you might ask why? Continue reading further to know more about it.
|Bank Name||Expected Time For NOC
|KOTAK MAHINDRA BANK||15|
|SUNDARAM FINANCE||20 – 25|
|SBI||3 – 5|
|Bank Name||Fees (INR)|
|KOTAK MAHINDRA BANK||750|
However, the bank may not provide NOC to you if there is any loan linked to the car or any outstanding balance left to be paid on the car.
The above-mentioned steps are valid if you are in a need of clearing your dues with the bank. Now, let’s have a look at two more scenarios through which you can sell your financed car.
The first scenario is when you are unable to pay the pending loan on the car and you have no other way to sell it. What to do in that case? Well, you can talk to the financier/ bank to cease your car. In that case, the financier/ bank conduct an auction in order to sell it. However, you might face a couple of blocks:
You can also try to find a new buyer for the car who is willing to pay your pending dues with the bank and then, you can sell and transfer your car. However, this just might lead to a dilemma. Here is how:
If don’t want to be stuck in a never-ending time loop? Well, we have the perfect solution for you – CARS24. Yes, if you choose us to sell your financed car, you will get the “guaranteed best price”. Add to that, we will do the needful in procuring all the documents required to sell your financed car. You can leave all the hassles to us as we provide free RC transfer too. You can visit our website – cars.24.com or call 1800-11-22-33 to book an appointment.