Can I sell a car with outstanding finance?

Selling a car with outstanding finance is common, with many motorists wanting to upgrade their vehicle midway through the contract, or their circumstances changing meaning that they no longer want the commitment of fixed monthly payments. Whether you can sell a car with outstanding finance will depend upon your situation and the type of finance agreement that has been taken out, we have taken a look at the most popular types of car finance below.


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Can I sell a car with outstanding HP finance?

Hire purchase payments explained

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.


Can I sell a car with outstanding PCP finance?

PCP payments explained

You can’t sell a car on PCP finance until you’ve repaid all repayments or the settlement figure. 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, 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 will result in you handing back the car rather than potentially cashing in on any positive equity in the vehicle.

Read more: Negative equity explained.


Can I sell a car with outstanding PCH finance?

Personal contract hire payments explained

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.


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.


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If you own your car, you can sell your car to by getting a free car valuation in under 60 seconds. With 350+ branches across the UK, you can book an appointment with one of our friendly Branch Managers and sell your car in under an hour.

If you have outstanding finance and have already obtained a settlement quote, you can still sell your car but the payment will need to be made to the finance company as they’re the legal owner of the vehicle. If you the settlement figure is lower than the valuation provided, you will be able to keep the additional money.


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, 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 (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 We facilitate the payment to your finance company for your agreement.


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