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Looking to sell a car with outstanding finance? Good news, there are several options you may have here! Refused Car Finance can help you get a car even if your current vehicle has outstanding finance against it. If you can’t afford the payments anymore, you could also consider refinancing a car loan to help reduce the payments.

Can I sell a financed car?

Having a car on finance and how you come to sell it depends on which type of car finance agreement you’re in.

Main finance agreements in the UK:

  • Hire purchase car finance (HP)
  • Personal Contract Purchase (PCP)
  • Personal Loan

If you can’t wait till the end of your car finance agreement, your ability to sell a financed car can also depend on if you are the legal owner of the car or not. When you buy a car through a personal loan, you are the automatic owner of the car from the start. However, car finance agreements such as Hire Purchase and Personal Contract Purchase are usually secured against the vehicle. This means that you aren’t the legal owner of the car until you make the final repayment or pay the ‘balloon payment’ on a PCP deal.

When looking to sell a car on finance, you will usually also be asked to obtain a settlement figure from the finance company.

choosing car finance package

Can I sell a car with outstanding Hire Purchase (HP) finance?

Hire Purchase car finance is a secured loan which means that the finance lender owns the car till you meet all the repayments until the end of the finance term. You can’t sell a car with existing HP finance as the car belongs to the lender. Once the finance has been settled and all payments made, then you could sell the car.

If you want to sell your car before the end of the agreement, you have two options. You can obtain a settlement figure from your lender which shows the amount still owed and any interest or charges for ending your agreement early. It will also give you a time period in which you would need to pay this figure. Once you’ve paid this off you will then be able to sell the car.

Alternatively, you can usually return the car to the lender if you’ve paid off less than half of the agreement’s total cost. However, you will need to repay the remaining instalments to meet half of the value of the car and pay any interest or additional charge. This is known as ‘voluntary termination’.

If you already have a car with HP finance on it and are not sure what to do, you can contact us directly and our car finance experts can help!

Car on finance

Can I sell a car with existing PCP finance?

A Personal Contract Purchase agreement is similar to HP, but you have more options at the end of the agreement. Just like hire purchase, you’re not the legal owner of the car till you’ve made the final repayment. PCP deals tend to have lower monthly payments as you are only paying off part of the car. Due to this, the final payment tends to be quite large and is known as the ‘balloon payment’. The lender will own the car throughout so you can’t legally sell the car.

You can sell the car if you pay off the agreement early. You can do this by requesting a settlement figure from your lender. The settlement figure will also include the large balloon payment so it can sometimes be more beneficial to pay off the agreement early if the settlement figure is lower than the value of the car.

Just like hire purchase you can also return the car to the lender through voluntary termination if you have paid half of the total amount due.

Can I sell a car that was bought with a personal loan?

Out of the car finance agreements we’ve covered, it’s the easiest to sell a car that was bought with a personal loan. Unlike HP and PCP deals, the car isn’t secure against the car. Personal loans can be used to buy anything you want, and you are responsible for meeting the repayments each month. You can sell the car at any time because you are the legal owner of the car. However, if you do sell the car, you will still need to make the repayments regardless. If you want to end the loan, you will need to contact your lender directly. 

Get your next car through Refused Car Finance

Now you’re clued up with the best ways to sell a car with outstanding finance on it. We can help you get your next car! You can hand the car back to the lender or you can bring your settlement figure to us and our car finance experts can help you get your next car. Not only can we match you with the most suitable finance lender but we can help you source a car within your budget.

Related – Can you change your car on finance?