Can I Sell My Car with Outstanding Finance?

It’s a question we receive time and time again at My Car Credit, so here’s everything you need to know before listing the car for sale.

Can I sell a car with outstanding hire purchase finance?

The short answer is unfortunately not. Until you settle the outstanding fees, the car belongs to the lender and isn’t yours to sell. What’s more, if you tried to make a sale without telling the buyer about the existing finance agreement, you could face severe penalties including car repossession, court proceedings and fraud charges.

However, you can work around these stipulations by contacting your finance company and asking them for a settlement figure. Once you’ve paid this, which amounts to the full sum left on your contract, the car will legally be yours to sell.

A word of warning

If you take the settlement route, it could end up costing you more money than expected thanks to early repayment and administration fees. Check with your lender beforehand to factor in these additional costs before making a final decision.

Another viable option is to visit a car dealership. Provided the settlement amount is less than the car’s total worth, you can put the difference towards a deposit for a new set of wheels. Once you’ve checked the figures, you can get a quote for a new finance deal and arrange monthly repayments with your lender.

Can I sell a car with an outstanding personal contract purchase?

Just like hire purchase agreements, the finance company legally owns the car when you take out a personal contract purchase agreement. 

If you wanted to sell, you must follow the same route of acquiring ownership through settlement beforehand.

What about a personal loan?

Personal loans work differently to car finance agreements. Assuming you paid for the car in full, you’re the legal owner of the car, and there are no restrictions when it comes to selling. 

Just remember, you’re still liable for the monthly repayments on your personal loan once you’ve handed over possession.

Voluntary termination

Some people look to sell their car because of difficulties keeping up with monthly repayments. However, in this case, an easier option could be voluntary termination.

Provided you have covered at least 50% of the total cost, and your contract includes a voluntary termination clause, you should be able to return the vehicle stress-free without making any further payments.

Are you looking for a car finance deal?

At My Car Credit, our goal is to make securing car finance as simple and accessible as possible, whatever your credit score or budget.

To find out how we can help you, give us a call on 01246 458 810 or drop us an email at enquiries@mycarcredit.co.uk. One of our knowledgeable team members will get back to you as soon as possible.