Selling a Car With Finance Owing in WA: Payout Letters, PPSR Checks and Your Options
You’ve decided to sell your car, but you still owe $9,000 on the loan. Can you market it? In general, yes. In WA it’s often possible to sell a car with finance owing, but you need to comply with your loan terms, get an up-to-date payout figure and ensure the lender is paid. If the lender has registered the car on the Personal Property Securities Register (PPSR), that registration must also be removed. The sale does not just eliminate the debt. This guide explains how payout letters and PPSR checks work, what happens if you owe more than the car is worth and your main options.
Can You Sell a Car With Finance Owing in WA?
Yes, usually. The WA Consumer Protection says most lenders allow a car under finance to be sold. However, generally you have to pay out the loan as part of the sale. You have to advise the buyer of any finance owing prior to sale. Check your loan contract for the specific rules.
Owning a security interest is not the same as being in debt. The debt is what you are owed. A security interest means that the car is used as collateral for the loan and the lender can repossess it if you don’t pay. An unsecured loan means that the car is not tied to the debt.
Before you advertise, check with your lender – are sales allowed, how will you get paid and are there any fees?
What Is a Car Finance Payout Letter?
A car finance payout letter or payout statement is a written figure from your lender of how much you need to pay to pay off your loan on a certain date. The lender will not release its interest in the car until it receives that amount.
A payout letter usually shows:
- the car finance payout figure, which can differ from your app balance as interest accrues
- the date until which the figure is valid
- any fees, such as an early termination fee
- how to pay.
Each lender sets its own format and validity period. Request the letter through your lender's app, phone line or branch, using your expected settlement date. Update it if the sale is delayed.
What Is a PPSR Check and Why Does It Matter?
The PPSR is a national government register. A PPSR vehicle search will reveal if a security interest is registered against a car, and also usually if it has been reported stolen or written off. It stops buyers from purchasing a car that a lender can take back.
A PPSR check in WA works the same way as anywhere else in Australia. Use the VIN or chassis number not the number plate to search the official PPSR website.
See what buyers will, check your own car first. The PPSR guidance states that a lender normally has to remove its registration within five business days of the loan being repaid.
The PPSR search will not show the amount owed, ownership history, odometer readings or mechanical condition.
How to Sell a Car With Finance Owing: Step-by-Step
Selling a financed car in Australia follows a similar pattern in each state, though details vary by lender.
- Contact your lender. Ask for a current payout figure, any fees and the settlement procedure.
- Check the vehicle on the PPSR. Confirm whether a security interest is registered.
- Work out your car's market value. Compare realistic offers with the payout figure.
- Agree on the settlement process. Confirm whether the buyer pays the lender directly and how you'll cover any shortfall.
- Get written confirmation. Ask the lender to confirm the loan is closed and the PPSR registration will be removed.
- Complete the sale. Hand over the keys only after payment clears, then notify WA's Department of Transport and Major Infrastructure of the transfer within seven days.
What Happens if You Owe More Than Your Car Is Worth?
This is known as negative equity. The sale price is less than your payout figure so the sale by itself will not repay the loan. You’ll have to pay the difference before settlement, or work out some other arrangement with your lender.
Let’s say you want to get paid $8,000 and you have a buyer that offers you $6,000. The lender gets the $6,000 and you usually have to come up with the other $2,000.
Ask your lender what it will accept; it doesn’t have to agree to any particular arrangement. If you are struggling to make repayments, contact your lender's hardship team or the free National Debt Helpline on 1800 007 007.
Can You Sell a Financed Car to a Car Removal Company?
Perhaps. It is contingent upon the policies of the company, the vehicle and your finance agreement. Tell the company about your great car loan before accepting an offer or booking a collection. Then confirm payment terms for the lender, how any shortfall will be covered and how the security interest will be released.
WA Car Removals removes unwanted and damaged cars in Perth and offers free removal anywhere in the Perth suburbs, according to its website. The site doesn't have a policy on financed vehicles, so make sure to mention the loan when you ask for a quote.
Your Options When Selling a Car With Outstanding Finance
Common Mistakes to Avoid
- ignoring your loan contract's terms
- using an out-of-date payout figure
- ignoring a security interest on the PPSR
- assuming the sale price clears the loan
- not disclosing the finance to the buyer
- handing over the car before settlement
- treating a PPSR search as a full mechanical and ownership check.
Frequently Asked Questions
Can I sell a car with finance owing in WA?
Usually, yes, but the loan generally needs to be paid out as part of the sale, and you must tell the buyer about it.
How do I get a payout letter for my car loan?
Ask your lender for a figure on your settlement date, and check how long it's valid.
Does a PPSR check show outstanding car finance?
It shows whether a security interest is registered against the car, not how much is owing. An unsecured loan won't appear.
What happens if my car is worth less than my loan?
You'll usually need to pay the shortfall before the lender releases its interest.
Can a car removal company buy a vehicle with finance owing?
Some may. Disclose the finance upfront and confirm how the lender will be paid before collection.
Conclusion
Get an up-to-date payout figure, check the PPSR and agree on a settlement process with your lender and buyer before you sell. One option for an unwanted or damaged car in Perth is WA Car Removals. Call the team and describe your vehicle to see if they can help with a financed car.