When it comes to selling your vehicle, We Buy Any Car makes some big promises. The car buying service operates more than 450 branches across the UK and as the name suggests, pledges to “buy any car”, making the process as quick, easy, and stress-free as possible. But what about cars that have been purchased on finance? Read on as we answer all your questions about whether We Buy Any Car buy finance cars and how to determine if the service is right for you.

Selling a financed car

There are all kinds of reasons why people choose to sell financed cars. Maybe you’ve outgrown your current vehicle and are looking to upgrade to a newer or larger model. Perhaps your financed car doesn’t suit your lifestyle as well as you’d hoped, or your financial situation has changed, and you can no longer commit to monthly repayments.

Whatever the scenario, selling a financed car is possible, if you have a good understanding of the process and your responsibilities as the owner or borrower. Basically, there are two different categories you can fall into:

You own the car outright

This scenario is by far the easiest of the two and means you have repaid your loan in full and own the car outright. A common scenario where this occurs is at the end of a Hire Purchase (HP) agreement, when you’ve finalised all payments towards the final cost of the car, plus settled the ‘option to purchase’ fee. This final payment sees you take full ownership of the vehicle. With it comes the freedom to sell the car however you like, including via the We Buy Any Car service.

There’s also the possibility to own your vehicle outright at the end of a Personal Contract Purchase (PCP) loan. A common form of new car finance, these loans require an initial cash deposit followed by regular monthly payments. At the end of the contract, many people choose to trade in their vehicle for a new car purchased with another PCP contract.

There’s also the option to buy the car outright, which involves paying off the value of the car. This amount is usually determined at the start of the contract, with the value of your initial cash deposit generally subtracted from the total. There can sometimes be additional fees involved when buying a car at the end of a PCP loan, so it’s always worth checking with your lender before deciding. 

You’re still repaying the car

If you’re still paying instalments on a car purchased on finance, the process is a little more complicated. First, it’s important to understand that until all scheduled payments have been made and any remaining balances are cleared, the lender remains the legal owner of the car. So, before you can start asking “do We Buy Any Car buy finance cars”, you’ll need to settle all amounts owing and take full ownership of the vehicle.

This could involve ending a PCP loan or HP agreement early, which can incur additional costs. We take a closer look at both options below:

Selling a car on a HP agreement

If you’re still paying off instalments for an HP agreement, the lender legally owns the vehicle. This means you can’t sell it until all outstanding amounts have been settled. You’ll need to terminate the HP agreement early and absorb any additional fees. These can include an early exit fee, which can be as low as 0.5% of the total remaining amount if you have less than 12 months left on your contract. If you have more than 12 months remaining on your HP contract, the early exit fee could be around 1% of the total remaining amount. However, these fees will vary dependent on your individual finance agreement and lender.

Some lenders don’t charge exit fees but instead ask you to cover the total cost of the interest remaining, had you continued with the loan. Writing to the finance company to propose a settlement is another option. If you can agree on an amount, you’re free to sell the car once the balance has been settled.

Selling a car on PCP finance

Like an HP agreement, you can only sell a car purchased on PCP finance after you’ve paid off the entire balance owing. This is generally done by writing to your lender to request a settlement figure. The amount will include all remaining payments scheduled for the vehicle, as well as interest. If you’re unsure how much interest you owe, our guide on how to calculate finance charge on car loan can help crunch the numbers. You’ll also need to settle the final ‘balloon payment’ needed for transfer of ownership to take place.

Returning a financed car

Another alternative is returning your financed car, which can be a good option if you qualify. This is available as part of the Consumer Credit Act 1974 which includes a section on the right to return the car to the provider.

Generally, this option is only available if you’ve paid off at least 50% of the total cost of the contract. This amount includes all interest and fees owing, not simply the original amount borrowed. If you’ve paid off less than 50% of the total cost of the contract, you may need to top up your instalments to meet this minimum requirement.

Don’t forget, there may be additional fees involved and you may still have to cover the cost of interest, so be sure to read the fine print in your contract before making a decision.

Understanding ‘voluntary termination’

There’s a good chance your contract may include a clause known as ‘voluntary termination’. If you see this, it means you’re free to return the car to the lender without making any extra payments. As mentioned earlier, you’ll need to have paid off at least 50% of the total value of the loan to qualify for this option.

Voluntary termination doesn’t usually affect your credit score, making it a good option if you’re researching whether We Buy Any Car buy finance cars.

Upgrading your car on finance

If you’re looking to sell your existing car and upgrade to a newer model using finance, My Car Credit is on hand to help. We compare deals across our broad panel of lenders to find car finance that fits your requirements. If you’d like to find out more, simply email us on enquiries@mycarcredit.co.uk or simply apply online, with no obligation and no impact on your credit score.

Rates from 6.9% APR. Representative APR 13.9%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 13.9%, annual interest rate (fixed) 13.85%, 47 monthly payments of £201.38 followed by 1 payment of £211.38 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £2,176.24, total amount payable is £9,676.24.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!