Can I Sell My Financed Car?

Car Finance Explained

Are you considering selling your car but still have outstanding finances? You're not alone. Many car owners find themselves in this situation, wondering if it's possible to sell their vehicle online before fully paying off their loan.

In this comprehensive guide, we'll explore the ins and outs of selling your car online, ensuring you navigate this complex process with confidence.

What is Outstanding Finance?

When you purchase a car through financing, you're essentially borrowing money to pay for the vehicle. Outstanding finance refers to the remaining balance on your car loan that you haven't yet repaid. This could be through various financing options such as Personal Contract Purchase (PCP) or Hire Purchase (HP) agreements.

Until you've fully paid off this outstanding balance, finance companies typically retain legal ownership of the vehicle, which is why selling a car with outstanding finance requires careful consideration and proper procedures.

Selling a Car With Outstanding PCP Finance

Personal Contract Purchase (PCP) is a popular car financing option. If you're looking to sell a car under PCP:

  1. Contact your finance company for a settlement figure

  2. Compare this figure to your car's current market value

  3. If your car is worth more than the settlement, you can sell it and use the proceeds to clear the finance, keeping any excess

  4. If your car is worth less, you'll need to make up the difference to clear the finance before selling

Selling a Car With Outstanding HP Finance

Hire Purchase (HP) agreements are another common form of car finance. The process for selling a car with outstanding HP finance is similar to PCP:

  1. Request a settlement figure from your finance company

  2. Assess your car's current market value

  3. If the value exceeds the settlement, you can sell and clear the finance

  4. If there's a shortfall, you'll need to cover this before completing the sale

What is a Settlement Letter?

A settlement letter is a crucial document when selling a car with outstanding finance. It's an official statement from your finance company that outlines:

  1. The current outstanding balance on your loan

  2. The date until which this figure is valid

  3. Instructions on how to settle the finance

This letter is essential for both you and potential buyers, as it provides clarity on the exact amount needed to clear the debt on the vehicle.

Is It Against the Law to Sell a Car With Outstanding Finance?

It's crucial to understand that selling a car with outstanding finance without informing the buyer is illegal. The finance company legally owns the vehicle until the loan is fully repaid. However, you can sell your financed car legally by:

  1. Informing the buyer about the outstanding finance

  2. Settling the finance before or as part of the sale process

  3. Obtaining permission from the finance company

Will a Dealer Settle My Finance?

Many dealerships are willing to handle the settlement process when buying your car. Always ensure you have a written agreement detailing this arrangement to help:

  1. Pay off your outstanding finance directly

  2. Deduct the settlement amount from your car's value

  3. Offer you the remaining balance (if any)

If you obtained your vehicle through bad credit car finance, Motormoolah can help you sell your car and settle your outstanding balance, regardless of your initial loan terms.

Motormoolah Can Settle Outstanding Finance

At Motormoolah, we understand the complexities of selling a car with outstanding finance. That's why we offer a hassle-free solution. When you choose to sell your car to us:

  1. We'll handle the settlement process for you

  2. Our team will liaise directly with your finance company

  3. We ensure a smooth, legal transfer of ownership

We Give Valuations in 15 Minutes

Time is valuable, and we respect that. With Motormoolah, you can get a quick and accurate valuation for your car in just 15 minutes. Our expert team uses the latest market data to ensure you get a fair price for your vehicle when you sell your car online.

Sell Your Car Online Today

Ready to sell your car online, even with outstanding finance? Motormoolah is a We Buy Any Car alternative that makes this process easy:

  1. Get an online valuation

  2. Book an appointment at one of our branches

  3. We'll inspect your car and handle all the paperwork

  4. Receive payment on the same day

Don't let outstanding finance hold you back from selling your car. With Motormoolah, you can sell your financed car quickly, legally, and hassle-free.

Get in touch today and begin your car financing process to maximise your car’s value.

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