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Selling a Financed car

Can I sell a financed car?

Using finance to purchase a car means that you don’t own the vehicle until the finance agreement is settled. We take a look at how you may be able to sell your financed car and what rules and regulations there are.

What finance options are available to you?

In your to sell you car on Finance, you need to:

Check your contract

  • There may be clause called ‘voluntary termination’. If you have paid at least 50% of the total of the loan, you can hand back the car without any additional payments. If the contract doesn’t offer this, you will need to contact the lender and ask for a settlement figure.
  • You’ll need to pay this sum before handing the keys to someone else. This can make it expensive to sell a car that’s still on finance.
  • Once you’ve got your settlement figure and got an accurate valuation on your vehicle, you’ll need to check you’re not in negative equity.

The difference between selling on PCP and HP

How to sell a car on HP

To sell a vehicle on HP you will need to end you agreement early, to do this you will need to contact the finance company. You will then receive a settlement figure that you will have to pay off in a set period of time.

If you’ve paid off less than half of the agreement’s total cost, you can return the car but you will need to make a lump sum payment to bring the value to 50%.

If you have paid over the 50%, you will be able to return the vehicle.

Another option is Part Exchanging your vehicle.

How to sell a car on PCP

You can’t sell your vehicle if you have it on PCP finance as you don’t own the vehicle yet.

You can however return the car under the voluntary termination clause.

If you have paid 50% of the total amount payable, you can then return the car.

Another option is paying off the remaining balance of the loan and keep the car to sell on.

What are the risks of selling a car with outstanding finance?

  • You need to make sure the balance has been closed before you sell your vehicle. If not you could be committing fraud. Check with the finance company that all debts has been settled before looking to sell.
  • There may be fees to pay for paying the contract off early.
  • Because the value of the car can change due to depreciation , you could end up in negative equity. This will then mean that what you need to pay off in order to sell your can will be more than what the car is worth.


I have a car on finance and can't afford it, what can I do?

Seek help from a finance provider. In certain circumstances an agreement can be terminated. Contact them as soon as you are struggling to make the payments so that you can discuss what options you have.

What happens if I don't pay my car finance in the UK?

If you don’t pay your car finance payments, lender can repossess the car. This will also affect your credit rating and could hinder your chances of being offered finance in the future.

What happens if my car is written off and it's on finance?

f the car is a write-off, you will be offered a settlement figure. Your insurance company may pay you for the vehicle, this may cover the amount you borrowed, however this isn't always the case.

Can you swap finance from one car to another?

You can trade your vehicle in for a newer model when you have finance on a car however the finance on the previous vehicle will have to be settled first. Contact the finance provider for a settlement figure.