Sell your car with outstanding finance

We can take the hassle out of selling your car, even where you have outstanding finance. Get started by entering your registration below to see how much your car is worth.

What happens when you sell your car on finance?

If you are financing a car through a HP (Hire Purchase) or PCP (Personal Contract Purchase) agreement, it will remain the property of the finance company until the money you owe has been paid in full.

Therefore, you technically do not have the right to sell it. However, in practice, it is possible to sell a car with outstanding finance.

Many leading car dealers and car buying services can settle finance on a car that is still under contract. This will enable you to exit your current contract, leaving you free to sell your car.

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The process to follow is outlined below:

  • Step 1: Request a settlement figure

    If you wish to leave your finance agreement early, you’ll need to request a ‘settlement figure’ from the car finance company. This sum will include your balance (i.e. what you currently owe on your car finance plan), in addition to any administrative and early settlement charges.

    The lender is legally obliged to post a settlement figure within 12 days of your request, but it won’t usually take this long. Settlement figures are typically valid for 10 days, although this can vary, so check the finance company’s letter for the expiry date.

    If you do not pay off the settlement figure within this timeframe, it will no longer be valid - and you will need to request a new figure from the lender, if you still wish to sell your car.

  • Step 2: Paying the outstanding amount

    Once you have received a settlement figure, you can proceed with the sale of the car. The money raised from the sale will be used to settle the finance.

    If your car is worth less than the settlement figure, you will need to pay the difference yourself to get out of the existing finance agreement. However, if the car’s value is greater than the amount you owe, you will be in ‘positive equity’, leaving you with money to put towards your next car.

    Most car dealers and buyers will be familiar with this process and should be happy to assist you if needed.

Can I settle the outstanding finance myself?

Yes, it is possible to pay off your settlement figure directly through the finance company. However, if you intend to sell the car, working with a car dealership or car buying service can help to make the process easier.

How to sell your financed car with webuyanycar

  • Get a free online valuation

    Just as you would if your car wasn’t purchased on finance, it all starts by getting your free online valuation. Simply enter your vehicles registration plate and mileage above.

  • Book an appointment at your local branch

    With over 500 branches across the UK, the average drive time to your local branch is less than 13 minutes. As you are selling a car with outstanding finance, you will need to bring an up-to-date settlement letter from your finance company which includes:

    • Your settlement amount.
    • Your agreement reference number.
  • Sell your car without the hassle

    At your appointment you will be greeted by a friendly Branch Manager who will inspect your vehicle to ensure the details entered online are correct. Where our valuation is higher than the settlement amount, we will pay you the difference. If our valuation is lower than the settlement amount, you will need to pay the shortfall by Debit or Credit Card. Once the sale is confirmed, we will pay your finance company within 4 working days.

Can I sell a car with outstanding HP finance?

The lender is the legal owner of a car bought on Hire Purchase until all payments have been made. In order to sell the car, you will need to end the agreement early by getting a settlement quote. To get a settlement figure, you will need to contact the finance company asking for one. You should receive a settlement figure within a few working days from the finance company, and will then have a set period to pay the amount stated. Once this figure has been paid, the vehicle can be sold.

If you have paid less than half of the total amount owed on your agreement, you could return the car to the finance company by paying the remaining instalments needed to bring yourself up to half of the remaining value; this includes any interest and fees. This is due to Section 99 of the Consumer Credit Act 1974 known as ‘voluntary termination’. You can read more about this in our guide on cancelling your car finance early.

Hire purchase payments explained

Can I sell a car with outstanding PCP finance?

You can sell a car on PCP finance if you have repaid all repayments or the settlement figure, this includes the final balloon payment, plus any additional fees. If you want to sell the car midway through your PCP agreement you will need to pay off the agreement early, which may be worth doing if the settlement figure is lower than the value of the car. Once the settlement figure has been paid, you will become the legal owner of the car, allowing you to sell the car to webuyanycar, privately or to a dealership.

Similarly to HP agreements, there will be a clause in your contract known as ‘voluntary termination’ that will allow you to return the car to the finance company if you have paid half of the total repayments. However, voluntary termination often results in you handing back the car rather than potentially cashing in on any positive equity in the vehicle. Taking ownership of the vehicle is at the discretion of the finance company, if you are provided with a settlement letter confirming the amount to clear the interest in the vehicle, and the original V5, we will be able to purchase the vehicle from you.

Read more: Negative equity explained.

PCP explained

Can I sell a car with outstanding PCH finance?

If you have obtained a car through a Personal Contract Hire (PCH) or other lease agreement, you don’t have the option to buy the car as part of the agreement and cannot sell the vehicle. With PCH you are essentially renting a car for a period set out in the contract, meaning that the car is always owned by the finance company and must be returned to the lender at the end of the agreement. In some cases, you can request a figure to buy the car at the end of the agreement, but this is at the discretion of the finance company.

PCH explained

Selling a car that was purchased with a personal loan

Unlike Hire Purchase and PCP agreements, you legally own the car if you have used a personal loan to purchase, assuming you paid for the vehicle in full. Since you are the legal owner of the car, you can sell it whenever you please. However, it is important to remember that you will still need to make the monthly repayments for the loan for the agreed duration.

Can I exchange my car with outstanding finance?

Yes, you can part-exchange a car with outstanding finance. To do this, you must:

  • Inform the finance company that you wish to sell the car and request a settlement figure.
  • Approach the car dealer you wish to part-exchange with and ask how much they will offer you for the car.
  • If you accept the dealer’s offer, the proceeds from the sale will go towards paying off the existing finance.

Positive equity

If the dealer’s offer exceeds your settlement figure, you will be in ‘positive equity’, leaving you with money to put towards your next car. For example, if your car is valued at £15,000 and you have £10,000 outstanding finance, after paying this off, you’ll have £5,000 to go towards your next car.

Negative equity

However, if the settlement figure is higher than the dealer’s offer, you will be in ‘negative equity’. You can choose to pay off the difference separately. Alternatively, the car dealer may allow you to add the outstanding sum to the new PCP or HP agreement.

Is it illegal to sell a car privately with outstanding finance?

Selling a car privately without informing the buyer about outstanding finance on the vehicle is illegal and would constitute fraud. In order to sell your vehicle to a private buyer, you would first need to settle any outstanding finance with the lender.

Alternatively, you can sell your vehicle to a car buying service, such as webuyanycar. We can settle any outstanding finance on your behalf to make the selling process easier.

Does voluntary termination of car finance affect your credit score?

No, contrary to popular myths, voluntarily termination of a PCP or HP agreement will not adversely affect your credit rating or credit score. However, after voluntary termination, some car finance companies may refuse any future finance applications from you.

As an alternative to voluntary termination, you can sell your car to webuyanycar - and we will settle the outstanding finance on your behalf.

To enable us to do this, you will need to provide us with an in-date settlement letter from the lender that includes the settlement amount and your agreement reference number.

Frequently asked questions

All you have to do is get in touch with your finance company and ask them for a “settlement figure”.

By law your lender has to post a settlement figure to you within 12 days – most times it comes straight away.

You will have a period – usually 10 days – in which to actually pay the amount off. If you pay by Direct Debit (DD), check the day it normally comes out of your bank – if they receive this amount before you settle the finance then you’ll need to take the DD amount off the amount you pay. You will need to provide evidence of payment to us if this is the case.

The short answer – mostly – is yes, you will save money by paying off your car finance agreement early. You get a rebate of interest, an amount laid down by the Consumer Credit Act 1974.

If you pay off early don’t take the whole amount outstanding and send the money – make sure you get your rebate of charges. All you have to pay is a couple of month’s interest and possibly some administration fees but check your agreement for your exact terms.

Yes, you should be able settle off a PCP agreement or terminate it by paying off the settlement figure. Again, read your finance agreement carefully for your exact terms.

You should be able to settle off a PCP agreement. In fact – when it comes to paying the final amount you should really check with us. Many agreements give you the right to give the car back. Don’t do that until you find out how much it is worth. Customers can sell to us rather than hand the car back as they get the additional cash because the car is worth more than the final payment.

In order to get freedom from paying car finance every month on a car where you owe more than its worth, webuyanycar can pay off the loan provided you advance them with the exact amount to make up the balance.

In order to settle your finance you’ll find the finance company’s address on the agreement you signed.

Don't forget, with a HP or PCP agreement you have to settle the finance on the car or terminate the agreement by paying off money owing before you can sell the car on to webuyanycar (or anyone else) although this can happen virtually at the same time but in that order.

Please remember that you have to get a finance settlement figure in order to sell your car to webuyanycar. We facilitate the payment to your finance company for your agreement.

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