What is required for a vehicle with a loan to be sold?

When selling a vehicle that has an outstanding loan, it is essential to obtain consent from the lender for the sale. This is because the lending institution holds the title to the vehicle until the loan is completely repaid. Selling a vehicle without the lender's approval can lead to legal complications, as the lender has a financial interest in the vehicle and should be notified of any intentions to sell.

The lender's consent ensures that the proceeds from the sale can be used to pay off the remaining balance of the loan. Typically, the sale process involves contacting the lender to understand their requirements, which may include setting up an arrangement for the loan to be paid off during the sale transaction. This makes obtaining the lender's consent not just a legal formality, but a crucial step to facilitate a smooth transfer of ownership.

In contrast, simply having the loan's payments paid off first, not taking any action as long as the buyer is informed, or requiring the vehicle to be re-registered in the seller's name first does not adequately address the necessity of the lender's acknowledgment in a vehicle sale with an outstanding loan.