Guide7 min read7 views
Updated 4 November 2026 · Written by the Wahanaya.lk team
Yes, you can legally sell a car privately on installments, but you can no longer hold the CR book as security until the buyer finishes paying, because the DMT has banned 'open papers' and will strictly enforce the 14-day transfer rule from 1 December 2026.
Yes, a private installment sale is legal. There's no law stopping you from agreeing to accept the price in parts instead of as one lump sum. The problem isn't whether you can do it — it's that the old way of protecting yourself, holding onto the CR book until the last rupee was paid, is now against DMT rules. From 1 December 2026, the Department of Motor Traffic (DMT) is strictly enforcing the 14-day ownership transfer rule and shutting down "open papers" sales. That changes how you should structure an installment deal.
Because that is exactly what "open papers" means, and it's the practice the DMT is now targeting. For years, sellers kept the registration certificate as informal security: no transfer, no legal ownership change, until the final installment landed. From 1 December 2026, the DMT says it will strictly enforce the rule that transfer paperwork must be filed within 14 days of the sale. Holding the CR book open past that window to use it as leverage against late payment puts you on the wrong side of this crackdown, and under the mandatory online transfer system being rolled out in 2026, undated or un-filed transfer documents are no longer meant to work at all.
There's also a real cost to you if you do it anyway. While the vehicle stays on your name, you're the one the DMT and police connect to its revenue licence, insurance status, and any fines or accidents — even though someone else is driving it and you may not have been paid in full.
Option 1: Point the buyer to a leasing company instead. If the buyer can't pay the full price upfront, the cleanest fix is for them to get a loan or lease from a bank or licensed finance company. You get paid in full at settlement, the finance company becomes the one chasing monthly payments, and the CR transfer happens cleanly through the normal process. Buyers can estimate what a monthly payment would look like using leasing before they commit, which also helps you judge whether they can realistically afford the car at all.
Option 2: Transfer ownership now, and secure the balance a different way. Since you can no longer rely on withholding the CR book, you need another form of security if you still want to offer installments yourself:
Option 3: Take a deposit, but don't spread the balance over months. Many private sellers avoid the whole problem by asking for a meaningful deposit (held until the balance is paid, often within days) rather than a long installment plan. This keeps the gap between "deposit received" and "full payment, transfer done" short enough that it doesn't turn into an open-papers situation.
If you decide to go ahead with installments yourself, put this in writing and have both parties sign and date it:
This agreement is not a substitute for registering the transfer within 14 days — it's protection for the money, separate from the ownership paperwork. If you're not sure how to word it, a lawyer or notary can adapt a standard vehicle sale agreement for an installment structure. You can also ask other sellers how they've handled this in the Wahanaya forum.
This is the real risk of private installment selling under the new rules. Once the vehicle is transferred, you no longer have the CR book as leverage. Without a registered mortgage or a strong agreement with enforceable terms (guarantor, postdated cheques, etc.), recovering unpaid installments becomes a private debt claim — slower and less certain than simply repossessing a vehicle you still legally hold title to. This is the main reason Option 1 (pointing the buyer to a bank or finance company) is usually the safer route for the seller, even if it means a slightly lower net price after any commission or fees.
Whichever route you choose, get your documents ready before you list the car: the original CR book, a valid revenue licence, your NIC, and your TIN. Check your current market price on price-check, list the vehicle on vehicles once you're ready, and when you post your ad on post-ad, be upfront in the description about whether you're open to installment buyers so you don't waste time with offers you won't accept. Read safety-tips before meeting any buyer, and if you're unsure how a specific lease or installment structure would work for your situation, ask in the Wahanaya forum before you sign anything.
When a buyer pays through a lease or bank loan, their finance company sends an approved valuer to inspect your car and registers itself as absolute owner on the CR book before you get paid, so expect extra paperwork and a short delay versus a cash sale.
Wahanaya.lk team8 min read
The safest payment is a bank transfer or bank draft you verify yourself by checking your own banking app or calling your bank — never a screenshot the buyer sends you. Don't hand over the CR book, keys or signed MTA 6 form until the money has actually settled in your account.
Wahanaya.lk team7 min read
Yes — the DMT's ownership-transfer system checks that your vehicle's VET (emission test) certificate and revenue licence are both in date before it lets the transfer go through, so renew an expired VET before you sell, unless your vehicle is exempt.
Wahanaya.lk team7 min read
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