If your financed car is no longer fit to drive and needs repairs that are worth more than the cost of the vehicle, you should think about selling it off to car wreckers. But what happens if you still owe some money to the bank and you don’t have the original ownership documents with you?
Well, then things start to get a bit complicated. Luckily, there is a way out of that and a way to get cash for cars even if they owe finance.
Here are a few scenarios of how you can scrap your vehicle that still owes finance.
Who Owns the Vehicle?
The person who owns the car should have all the ownership documents. However, that is not always the case. If the vehicle is financed, the relevant documents lie with the bank or the financing company.
What should you do in such a situation? After all, you cannot legally sell your car or scrap it without clearing the money you owe to the company. Moreover, if you even try to sell your vehicle to car removal companies, you could hurt your credit score and destroy any chances of getting future loans.
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How to Scrap a Financed Car?
You could pay off the outstanding amount to the lender and acquire the ownership documents. When you get the papers, you have full liberty to dispose of your car in a scrap yard.
But if the remaining amount is too high and it is impossible to pay it off, there is another option. You could find scrappers, who are willing to transfer the ownership from you to themselves through the help of the lender and the governmental authorities. If you go through the legal process, you can get rid of the ownership and the car in one go.
Will a Scrap Yard Accept a Car with Outstanding Finance?
Some scrap yards offer this service and they are willing to pay off the remaining amount to the lender, given you transfer ownership to them and waive off your ownership rights.
First, you will need to link with the New Zealand Transport Agency and ask them about the relevant documents needed to transfer the title of ownership. Once that is out of the way, you can move towards bringing the scrap yard into the equation and linking them with the lending authority. When all three parties are on one table, you can successfully transfer the ownership, even though you owe finance to the vehicle.
Alternatively, the scrapper could write a check and pay off the remaining debt on your end and acquire the vehicle later from you, once the ownership is transferred.
Just make sure you get a quote from the wrecker and weigh that properly before making any deal. If you are getting good money, there is no harm in selling off your vehicle that still owes finance.
