Do you have a financed car that’s no longer roadworthy or taking too much money for regular repairs? You might be thinking of selling it to a car wrecker. However, you cannot sell it directly if the car is under finance. You have to clear or settle the loan first. Let’s break down everything you need to know before calling a wrecker.
Suppose you don’t have enough money to buy a car. You can take help from car finance or car loan companies to purchase a car. The process is straightforward: a finance company or lender provides you funds to purchase a car.
The finance company or lender retains a legal interest in the vehicle until you have made the final payment. This means your car is not entirely yours. The lender’s name is recorded in the Personal Property Securities Register (PPSR). You can not sell, legally scrap, or transfer ownership of your car without the lender’s approval.
No. You can’t scrap or sell a car that’s still under active finance without the lender’s approval. If you do that, you will be considered a fraud because you’re disposing of property you don’t fully own.
Certified wrecker or car removal companies often check if there’s any finance owing on it before collecting your car. If the finance is still attached, they will usually reject the car unless you can provide proof that the loan is cleared.
Licensed car wreckers in New Zealand must obey the law. They would not simply scrap a car that still has money owing without the clearance from the finance company. To proceed, you will need:
This ensures that the ownership is fully transferred and you’re not liable for the vehicle anymore.
If paying off the loan or negotiating with your lender isn’t possible, here are some other options:
