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Can you sell a car on finance?

21/02/2024

Selling a car on finance with Money4YourMotors is quick and easy. Depending on the type of finance you have in place, our experts are on hand to help.

Securing a car on finance has become increasingly common, as it allows road users to spread the cost over a longer time period. But can you sell your car on finance? In most cases you can, but it ultimately depends on the type of agreement you have on your vehicle and who you want to sell it with.

If you’re legally able to sell your vehicle, our expert team will help to make the process hassle-free. However, if you’re unsure whether your current finance plan will allow you to sell, our motoring experts will explain everything in this handy guide.

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Can I sell a financed car?

In 2023 alone, 1.5 million cars were financed in the UK, via a range of different agreements. If you have a financed vehicle, it will have been leased to you via one of the following plans. Your finance provider can let you know which one you’re on.

Personal contract purchase (PCP)
Hire purchase (HP)
Personal contract hire (PCH)
Personal loan

For most of these options, you’re not legally the owner of the car until the finance has been paid off in full. Before you start the selling process, it’s important that you understand the finance plan you have, and how it can affect selling your car.

Type of finance	Who owns your vehicle?	Can you sell your car to us?
PCP	You, once final payments have been made	Yes
HP	You, once final payments have been made	Yes
PCH	Your finance company	No
Personal loan	You	Yes

Can you sell a car on PCP?

If your vehicle was financed through PCP (personal contract purchase), you’ll be able to sell it if all repayments have been made. Alongside a settlement fee of remaining payments and any interest accrued, most PCP agreements include a final lump sum payment called a ‘balloon fee’, which will also have to be settled before selling your car.

If you still have repayments to make once you’re ready to sell your financed car, we can buy your car and pay your finance provider directly. If the purchase offer covers the final settlement fee, any other money will go to you. If not, you’ll need to pay the difference.
To sell your car privately, you’d need to ensure that all the remaining finance has been paid beforehand, which is a legal requirement.

Can you sell a car on HP?

Your vehicle can also be sold if it's under HP (hire purchase). Unlike PCP, there is no final balloon fee at the end, meaning that you will own the car at the end of your repayments.

If you want to sell your car before the end of your payment plan, you’ll need to pay a settlement figure. Just like PCP, this can be agreed with your provider, and brought to a car-buying service like ours, or a dealership for sale.

Can I sell a car on PCH?

If your car is under PCH (personal contract hire), you won’t be able to sell it on.

This type of plan is essentially a rental option, so you don’t have the right to sell the vehicle. Some providers may offer you the option for you to buy the car for a fee, but it’s at their discretion to do so.

Can I sell a car bought with a personal loan?

If your car was purchased with a personal loan, then yes, it is yours to sell. Remember, even though you’re able to sell the car with more freedom, any debt outstanding will need to be paid off.

The money you make from selling your vehicle can be used to pay off any remaining loan or purchase a new car, the choice is yours.

Can I sell my car with outstanding finance?

If you’ve purchased through PCP and HP, you will need to ensure that any remaining repayments have been made before you try to sell. If your car was bought using a personal loan, then you have the flexibility to sell the vehicle whenever is best for you. You’ll still have to pay the remaining balance, but it gives you more freedom to sell.

FAQs

It’s illegal to sell your car if you don’t own it. This is the case with several finance plans, so make sure you know which plan your car is under before selling and communicate with your finance company if you do decide to sell.

If you sell your car without paying the outstanding finance, you can be asked to pay what is owed, and legal action is also possible. Check with your finance provider and car buyer to make sure your payments are covered.

No, a voluntary termination does not affect your credit rating. Make sure to check with your finance provider for more information.

No, the car is not yours to part exchange while you still have outstanding finance, which must be settled (though some dealerships might be able to support you with this). Selling a financed car can come with some challenges, but we make it easy to sell your vehicle with us.

This is dependent on the type of finance you have, along with the provider you have used. In most cases, you will be able to give your car back to the finance company, but there may be a fee to pay to do so. Make sure you speak to your finance provider beforehand.