Yes, but not in the way most people assume. A vehicle with money still owing on it cannot simply change hands, because the finance is secured against the vehicle itself rather than against you personally.
Understanding that one point makes the rest straightforward.
What a security interest actually means
When a vehicle is financed, the lender ordinarily registers a security interest against it on the Personal Property Securities Register, the PPSR. That interest follows the vehicle, not the borrower.
The practical consequence: if the vehicle is sold while the debt is outstanding, the lender may retain the right to repossess it from the new owner. This is why informed buyers check the PPSR before purchasing, and why a vehicle with an undisclosed encumbrance is difficult to sell.
The three realistic paths
Pay out the loan first
The cleanest option. Request a payout figure from the lender, settle it, confirm the security interest has been removed, then sell with clear title.
Worth knowing: a payout figure is not the same as your remaining balance, and it has a limited validity period. Ask for it in writing.
Pay the loan out from the sale proceeds
Common where the vehicle is worth more than is owed. The sale proceeds settle the finance and you retain the difference. This needs coordinating with the lender, who will confirm when the debt is cleared and the interest can be released.
Sell in negative equity
Where the vehicle is worth less than is owed — frequently the case after an accident or write-off — the shortfall remains payable by you. Selling still often makes sense, because it stops further loss on a vehicle you cannot use, but the debt does not disappear with the vehicle.
Where this gets urgent
The situation that catches people out is a financed vehicle that has been written off or badly damaged. The vehicle is unusable, the finance continues, and any insurance settlement may not cover the balance.
In that position, the salvage value of the vehicle becomes directly relevant, because it reduces the shortfall. Knowing that figure is worth having before you make decisions about the finance.
Checking what is registered
You can search the PPSR yourself for a small fee using the vehicle's VIN. It is worth doing if you are uncertain what is registered against the vehicle, or if the finance is old and you believe it may already have been discharged. Sometimes an interest remains registered after a loan has been paid, and it needs to be cleared.
What we can and cannot do
We buy vehicles with finance owing, but we cannot pay out your loan for you or negotiate with your lender. What we can do is give you an accurate figure for the vehicle so you know what you are working with.
That number is often the missing piece. Whether you are deciding to pay out, sell, or work out a shortfall, it is hard to plan without knowing what the vehicle is actually worth.
What we will need
- Photo identification
- Proof of ownership
- Confirmation of the finance position, and the lender's agreement where the payout runs through the sale
This is a situation where speaking to us directly is more useful than a form. Call 0405 294 555 and explain the position, or send photos through WhatsApp for a free, no-obligation figure. Towing is included, and there is no obligation to proceed.