Many drivers ask: can I sell a car that I’m still paying for?

The answer is yes — but with conditions. It depends on the financing contract you signed with your bank or leasing company.

1. Types of car financing

There are two main types in Portugal:

• Standard car loan: the car is in your name, but the bank keeps ownership reservation until it’s fully paid off.
• Leasing or long-term rental (ALD): the car remains the property of the finance company until the end of the contract.

In both cases, you can’t legally sell the car until the debt is settled or the lender authorizes it.

2. What is ownership reservation

An ownership reservation (reserva de propriedade) is registered with the IMT, preventing you from transferring ownership without the lender’s approval.

Even though the car is registered in your name, the bank controls its sale.

3. How to sell a financed car

You have three main options:

1. Settle the debt before selling.
2. Request the remaining balance from the bank, pay it off, and remove the ownership reservation.
3. Sell with the bank’s approval.
4. The buyer can take over the loan (if approved) or pay you, and the money goes directly to clear the debt.
5. Transfer the loan.
6. Some lenders allow you to transfer the finance contract to the new owner after credit assessment.

4. Documents and precautions

Before listing the car for sale:

• Check if there’s an active ownership reservation (IMT website);
• Ask the bank for the exact remaining balance;
• Get written authorization for the sale.

Trying to sell without clearing the reservation can lead to legal and financial issues.

5. Alternative: trade-in or sell to the lender

Some dealerships and finance companies will buy the car back or accept it as a trade-in.

They use the sale value to pay off your loan — and you receive any remaining amount.

Tip: Always talk to your bank before selling. In many cases, early repayment can save you money and simplify the process.