Many cars in the UAE are bought on finance, and plenty of owners want to sell before the loan is finished, especially when the car is damaged, no longer needed or they're leaving the country. You can do it, but while there's a loan, the bank has a hold on the car. That hold must be removed before ownership can change.
Why the bank has to be involved
When a car is financed, the bank's interest is usually recorded against the vehicle's registration. Until the loan is settled and the bank releases it, the car can't be transferred to a new owner or scrapped in the normal way.
The general steps
- Ask your bank for the settlement amount. Request a liability or settlement letter showing exactly what you owe to close the loan early, including any early settlement fees.
- Get a price for the car. Find out what the car is worth so you know whether the sale covers the loan. Send us the details for a fixed offer.
- Settle the loan. Pay off the outstanding amount. If the sale price is less than the loan, you'll need to cover the difference.
- Get the clearance letter. Once paid, the bank issues a clearance letter for the vehicle.
- Remove the bank's hold from the registration. This is done with the RTA using the clearance letter. Check the current process on the RTA website or app.
- Sell the car. With the hold removed, the car can be sold or scrapped as usual.
What if the car is damaged or written off?
If the car was in an accident and insured, speak to your insurer first. In a total loss, the insurer often settles with the bank directly. If you're left with the car and a remaining balance, you'll still need the bank's clearance before selling.
What if you're leaving the UAE?
Settle the loan before you leave if you can. An open car loan can cause problems when you close your accounts and leave the country. If you've already left, see selling your car from abroad.
Documents you'll usually need
- Emirates ID or passport
- Registration card (Mulkiya)
- Bank clearance letter
- Car keys
More details in our documents guide and step-by-step selling guide.
Frequently asked questions
Can I sell my car if it still has a bank loan in the UAE?
Yes, but the loan must be settled and the bank must release the car before ownership can change.
How do I find out how much I owe?
Ask your bank for a liability or settlement letter. It shows the amount needed to close the loan, including any early settlement fees.
What is a bank clearance letter?
It's the bank's confirmation that the loan is paid and it no longer has a claim on the car. You need it to remove the bank's hold from the registration.
What if the car is worth less than the loan?
You'll need to pay the difference to settle the loan before the car can be sold.
Can I scrap a car that still has a loan?
Not until the loan is settled and the bank releases the car.