Let us say that you bought a car that was out of your budget by taking a car loan in the UAE. However, owing to some financial troubles, you are not able to repay your loan. You wish to sell your car in the UAE but the law in the UAE prohibits selling a car with outstanding finances in the UAE. If you are stuck in such a situation, this article will help you to sell your car with a loan in the UAE.
Basic Requirement
Before putting your car on sale, you should get it tested by Road and Transport Authority. They will check your car for glitches and problems and fix them (if any). Once your car passes the test, RTA will provide you with a certificate that will certify the good condition of your car. This will help you in selling your car in the UAE at a reasonable cost. RTA will charge a nominal fee of AED 120 to conduct the test. This certificate will be valid for 30 days. At the time of selling your car, the buyer will pay you the fee for the test.
What are your options?
You have two possible options that may allow you to get rid of that loan and sell your car:
A buyer who needs finance to purchase your car
A buyer who is willing to pay your loan to purchase your car
A buyer who needs finance to purchase your car
If you are using this option to sell your car with a loan in the UAE, you require:
Finding a purchaser who needs a car loan to purchase your car
Besides, the buyer must agree to take the loan from the same bank that had lent you money to purchase the car
Once you have found a suitable buyer who is meeting your requirements, ask the buyer to visit your bank to receive approval for a car loan
The buyer may need to provide documents such as Emirates ID, salary certificate, Visa (if expatriate), copy of passport. Please note that the buyer should have residential proof of the Emirate region from where the car is registered. In case they do not reside in the same region, they need to buy or rent a property in the region from where they are purchasing the car to legally own the car
Provide the buyer with a valuation certificate ensuring the value of the car that justifies the loan amount
Once the buyer has taken the loan for the car, request the bank to settle your debt
To close the loan, you will need the new registration card and a copy of comprehensive car insurance for the financed value of the car from the new owner.
A buyer who is willing to pay your loan to purchase your car
In case you opt for this option to sell your car in the UAE, you will need:
A buyer who is willing to pay off your debt to purchase your car.
Once you have found a buyer who is willing to pay your car loan, visit the bank and confirm the exact pending amount
Also, confirm about the penalty for early closing of your loan
After this, you will need to grant a power of attorney to the buyer.
This power of attorney will grant power to the buyer to manage the purchase and debt of your car on your behalf.
You will also require signing a declaration that confirms that the ownership of the car will be legally transferred once the loan and remainder of the payment is settled
Once you have bestowed the authority upon the buyer, visit the bank with the buyer to pay off your loan
After paying the loan, you will require waiting 2-3 working days for a bank to inform RTA about your loan.
After 2-3 days confirm with your bank if they have informed the RTA
As soon as the bank confirms that it has informed RTA, visit RTA with the buyer to complete the legal transfer
Caution: Power Attorney not only disperses the authority of selling the car but also gives the authority to the person with power of attorney to take other decisions regarding your car on your behalf. Be careful while transferring the power of attorney.
