Can I Sell a Car on Finance?

When it comes to selling a car that you’re still paying off, there are some important things to consider. Let’s dive into the details.

Firstly, it’s essential to understand that when you have a financed car, technically, you don’t own it.

Why? Because it belongs to the finance company, until the contract is completed. However, in most situations, you can still sell the car to a car dealer who will be experienced in settling the finance and facilitating the process.

How do I sell my car on finance?

There are actually two ways of doing this.

The first is simple, just let your dealer deal with everything if you’re buying a replacement car. If you’re buying from the same dealership as you brought from before, the process should be very easy.

However, not everyone wants to do this, so here’s the rundown of how to sell your vehicle (car, van, bike, doesn’t matter…) with outstanding finance yourself:

  1. Contact your current finance company and request what’s called a settlement figure.
  2. The finance company must provide the settlement figure within 12 working days, although they often respond quicker than that.
  3. The settlement figure represents the total amount you’ll be required to pay off the remaining finance.
  4. You have 10 days to pay off the settlement figure and sell your car.
  5. Use the proceeds from selling the car to immediately settle the finance.
  6. Selling the car within the 10-day period ensures the settlement figure remains accurate.
  7. If the value of the car is lower than the settlement figure, you’ll need to cover the shortfall to settle the finance.
  8. It’s important to follow the correct procedures ie. do not attempt to sell the car privately without settling the finance first.
  9. Selling the car through a dealership can be great as they are familiar with the process and can assist in negotiating the settlement figure.
  10. Dealerships can handle the paperwork and facilitate a smooth transition to a new vehicle if desired.

Can I sell a car with outstanding PCP finance?

Again, yes… usually.

If you have outstanding PCP (Personal Contract Purchase) finance on your car and you’re considering selling it, there are a few important factors you need to consider first.

PCP finance is a popular option among car buyers, allowing you to make an initial deposit and monthly payments over a specific period, typically ranging from two to four years. At the end of the agreement, you have three choices: return the car, enter into a new finance agreement for a different vehicle, or make a final payment to own the car outright.

To sell a car with outstanding PCP finance, the first step is to contact your finance company and request a settlement figure (see above). This settlement figure represents the amount you need to pay in order to settle the finance and become the legal owner of the car. It encompasses any remaining finance payments, accrued interest, and, if applicable, the final balloon payment. It’s crucial to note that until the finance is settled, the car technically remains the property of the finance company.

What if I have PCP outstanding and want to sell privately?

If you decide to sell your car with outstanding PCP fiannce privately, you must engage in discussions with your finance company to agree on a settlement amount.

This amount needs to be paid off before you can transfer ownership to the buyer. It’s of utmost importance to be completely transparent with potential buyers about the existence of outstanding finance on the vehicle to avoid any potential legal complications too – alternatively, you have the option of selling the car to a dealer who can provide guidance throughout the process, helping you negotiate the settlement figure with your finance company.

How do I sell my car to a dealer (with outstanding finance)?

Selling a car with fnance, if you’ve never done it before, can be like navigating through uncharted waters. But fear not, dealerships act as seasoned captains who have sailed these waters many times before. They have the expertise to guide you through the process and ensure a safe journey – they do it every day!

When you approach a dealership with a car that is still under finance, they should become your trusted navigator. They understand the intricacies involved and can assist you in negotiating with your finance company to determine the settlement figure. Don’t be put off by the horror stories about shady dealers as these are often a thing of the past now, as dealer regulations have tightened in the UK.

However, it’s important to keep in mind that the value of your car might not always align with the settlement figure. Imagine the settlement figure as the destination port you need to reach. If the value of your car falls short of that figure, you’ll need to bridge the gap. This means you’ll be responsible for covering the difference – more on that later.

Will my dealer buy my financed car?

Usually, yes.

Dealerships can offer valuable support throughout this process, providing you with options and alternatives. They can help you explore different routes to ensure a smooth transition: like skilled navigators, they have a wealth of knowledge and resources to make your journey as seamless as possible.

The process differs depending on the type of finance agreement you have. Let’s explore the possibilities:

  1. Personal Contract Purchase (PCP): With PCP finance, you have the option to pay an initial deposit and a series of monthly payments for a fixed term. At the end of the term, you can choose to return the car, enter into a new finance agreement, or pay a lump sum to own the car outright. To sell a PCP-financed car, you’ll need to contact your finance company to agree on a settlement figure, which includes any remaining finance payments, interest, and the final balloon payment.
  2. Hire Purchase (HP): With HP agreements, you rent the car for a specified period, and your monthly repayments gradually pay off the total cost of the vehicle. Unlike PCP, there is no final balloon payment. If you wish to sell a car under an HP agreement, you’ll need to reach a settlement amount with your finance provider, covering any remaining monthly payments and interest.
  3. Personal Contract Hire (PCH): PCH, also known as leasing, is a long-term rental agreement. You do not have the option to buy the car at the end of the contract, so selling it is not possible. If you’re interested in keeping the car, you may inquire with the lease company about purchasing it, but they are not obligated to sell.
  4. Personal Loan: If you used a personal loan to purchase the car, you own it outright from the beginning. You can sell the vehicle, but keep in mind that the outstanding loan amount would still need to be paid off.

What if I can’t pay back my car finance early?

It’s crucial to take the right actions and get the help you need if you ever find yourself in a position where you can’t afford to pay off your car finance. Some ideas to think about are as follows:

  • Figure out where you stand financially: The first step is to assess your present financial situation and figure out why you can’t make an early payment on the car loan. Evaluate your source of income, your outgoing costs, and any other financial commitments you have. You can better understand your financial situation after taking this test.
  • Contact your bank and be as honest as possible about your current situation: you could get advice on how to handle the payments from them after all. Rememeber: it’s crucial to keep lines of communication open and take the initiative to find a solution. Don’t “put it to the back of your mind”…
  • Get professional help with your finances by talking to a financial advisor or a debt management company. Debt consolidation and renegotiating repayment conditions are only two of the options they can advise you on based on your individual situation.
  • Investigate government aid options: Those having financial troubles may qualify for government aid programmes, depending on their country and individual circumstances. Find out about any programmes that exist to help people like you with car payments and insurance.
  • Examine your income and spending more closely. It’s possible that you’ll have more money after doing this, which you can put towards your auto loan. Cut back on extravagances, haggle with your utility companies, and look at other ways to save money.
  • If you’re unhappy with the terms of your car loan, it may be time to look into refinancing. Changing the terms of your loan could mean lower monthly payments or a longer time to pay back the principal. Before making a final decision, though, you should think long and hard about the consequences of refinancing.
  • Seek the help of a solicitor or legal expert if all else fails: This is especially true if you are in a really dire straits financial situation and require help in negotiating with your loan company. A solicitor or financial lawyer even can give you advice tailored to the particular laws and rules that apply to your case.

What happens if I sell a car privately with finance?

Here’s the deal: if you’ve got outstanding finance on your car, it’s crucial to settle it before selling. It might be tempting to take the cash from a private buyer, hand over the keys and logbook, and call it a day. But here’s the truth: doing so would be considered fraud.

Why is that? Well, think of it this way: until you’ve fully paid off the finance, you don’t legally own the vehicle. It still belongs to the finance company. So, selling it without settling the outstanding finance would be like selling something you don’t actually own. And that’s not cool.

To sell your car legally, you really must settle any outstanding finance first. This means clearing the debt with the fniance company before transferring ownership; it’s the right thing to do, ensuring a fair and transparent transaction, so don’t overlook it.

Sure, settling the finance first might seem like an extra step, and it can be a bit of a hassle, but trust me, it’s the responsible and lawful approach. It protects both you and the buyer from any potential legal issues down the road.

So, when it comes to selling your car with outstanding finance, remember this golden rule: settle it first.

Can I sell my car if it’s got a personal loan against it?


If you’re paying off your car with a personal loan, in the UK by law, you can indeed sell it. The key difference here is that with a personal loan, you own the car outright from the beginning, and it’s not subject to any outstanding finance.

When you have a personal loan to finance your car, you have complete ownership of the vehicle right from the start. So, if you decide to sell it, you have the freedom to do so without any legal restrictions.

However, it’s important to keep in mind that if you sell the vehicle before fully paying off the personal loan, you’ll still be responsible for repaying the remaining debt. Selling the car won’t automatically eliminate your obligation to repay the loan amount.

So, if you’re planning to sell a car that you’re paying off with a personal loan, ensure that you settle the outstanding loan amount before transferring ownership. This way, you can complete the transaction smoothly and fulfill your financial obligations.


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Our experts continually monitor motor industry news & research, and we update our articles when new information becomes available.

  • 27th June 2023
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