In todays uncertain economic climate it is not uncommon to find that people need to sell their car because they cannot meet their loan repayments. While one option that people have in this situation is to sell their vehicle and hope that the money they get for it will be enough to cover the outstanding balance of their loan, another option may be to opt for a take over car loan.A take over car loan is essentially where the buyer of a vehicle will take over the loan repayments of the seller instead of obtaining their own finance and buying the car outright from the seller. While this is a situation that does require some negotiation between both parties, a take over car loan can be a very workable solution in order for the buyer to secure the purchase of the vehicle and for the seller to ensure that they are able to cover the cost of their outstanding debt through the sale of their car. There are two ways that a take over car loan can work.
The first way is for the seller to sign over their loan contract to the buyer. This would involve both parties approaching the relevant lender to negotiate a take over car loan. The buyer would still need to produce the necessary financial documentation to the lender in order to prove their ability to repay the debt and go through the appropriate approval process. Providing the buyer is approved for the outstanding debt most lenders will be prepared to consider a take over car loan, as it is a better option for them than if the loan was to go into default.
