What you need to know
A car with hypothecation on its RC cannot be transferred to a buyer until the loan is cleared and the bank’s charge is removed, or the buyer’s lender takes over with the seller’s bank NOC. The RTO process now runs largely online through Vahan / Parivahan.
Selling a financed car
- Get the foreclosure amountAsk the bank for a statement valid to a date.
- Close the loanOften from the buyer’s payment or the buyer’s lender.
- NOC + Form 35From your bank; apply for hypothecation termination.
- Transfer ownershipForm 29 (notice of transfer) and Form 30 (transfer application) with RC, insurance, PUC, IDs.
- Buyer’s new loanIf the buyer takes a used car loan, their bank’s hypothecation is added with Form 34.
Moving to another state
- Form 28 NOC from the original RTO (the financier’s NOC is needed while the loan is running)
- Pay road tax in the new state as per its rules (refund of unused tax from the old state is subject to its rules)
- Inform your bank and insurer of the new address and registration
Frequently asked questions
Can I sell my car before the loan is repaid?
Yes, but the bank must be paid off (or consent) first; the buyer gets a clean RC only after hypothecation is removed.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.