How you can sell a car in Dubai with a loan on it
Planning to upgrade your wheels, but you still owe money on it? Selling a financed car can be a little tricky but it’s certainly possible. When it comes to selling a car with a loan in Dubai, there are a few options to consider. You can pick the one that best fits your needs. Read on to find out how to trade in a vehicle while still paying off the loan.
How to sell a car with a loan in Dubai
Here is a list of three options that you can choose from to sell a bank-financed car in Dubai.
Pay the loan
One of the easiest things to do if you’re selling a vehicle under bank financing is to consider paying the loan. Once you have cleared the debt:
- Make sure your bank has notified the RTA about the clearance of debt. It may take a few working days
- Request an official release letter from the bank. This is a critical step that not many car owners are aware of.
Look for a finance buyer
If you can’t clear the balance, here is what you can do to sell your vehicle with a loan:
- Look for a buyer who can purchase your car on a bank loan through the same bank as you.
- Inform the bank that you have found a buyer and transfer the loan to their account. Not all banks have this policy; however, banks such as Emirates NBD, Noor Bank and Dubai Islamic Bank allow this. So it’s essential to check with the bank and evaluate if this option is feasible.
- Ask the buyer to initiate a loan application and get approval from your bank.
- They will also require a valuation certificate to prove that the loan amount is based on the value of the car.
- If you have asked for a price different to the outstanding debt amount, ask the bank to settle your balance using the buyer’s loan. The balance could include an early settlement fee (usually 1% of the loan value).
- You will then have to transfer ownership of the car to an RTA or Tasjeel centre.
- The buyer will then need to provide the bank with their new registration card and a copy of the insurance policy as proof of ownership and close the loan.
Find a cash buyer
Another option could be to find a cash buyer willing to pay your loan to the bank directly.
- Once you find a cash buyer, sign a Power of Attorney letter to give the new buyer the rights to the car when the loan is cleared.
- Ask the new buyer to go to the RTA once the bank notifies the regulatory body that the payment has been made.
Go for an auto-loan payout
The third option for selling your financed car in Dubai is an auto-loan payout. Emirates NBD offers a convenient financing option known as AUTOSWAP in Dubai. Launched in collaboration with dubizzle, this feature enables people to sell their financed car without paying the loan amount. The buyer gets a new loan to finance this purchase. To opt for AUTOSWAP:
- Visit Emirates NBD
- Under Personal Banking, choose Auto Loans and then AUTOSWAP.
- Enter your name, email address and contact details
- Mention the age of the car
- Apply
A dedicated officer from the bank will get in touch with you to complete the process.
FREQUENTLY ASKED QUESTIONS
What are the things to remember before selling a car with a loan in Dubai?
- If a car is under bank financing, it can’t be sold unless any of the above methods settle the balance.
- You have to complete the car test to make sure the car is functional. The vehicle testing fee costs AED 150. After the test, the RTA issues a certificate if the vehicle has passed the test.
What are the documents required for the buyer?
The buyer must have the following documents:
- Valid insurance for the car
- Passport with residence visa
- Emirates ID
- UAE driving license
And that brings an end to our guide on how to sell a car with a loan in Dubai. The new UAE debt law has new regulations to debtors pay back their loans.
If you plan to buy a used car in Dubai, there are many car dealers and auto malls where you can find quality second-hand vehicles. The transfer of car ownership in the UAE is not complicated when you have the right paperwork and follow the procedure as instructed.
If buying a car doesn’t seem to be a suitable option, renting a car is also possible in Dubai. Here is a list of the best rent-a-car companies in Dubai that you can check out to get information about car rentals.
There are also quite a few car-sharing services in Dubai, such as Ekar and Udrive, that can quickly help you commute within the city.
