Can you sell car outstanding finance

This figure is the total amount you'll need to pay your lender to terminate your contract to end the finance agreement and will include any fees. Lenders are required, by law, to provide the settlement figure within 12 days of the request and you should request this figure in writing.

With HP or PCP finance agreements, you're unable to sell the car privately whilst you have outstanding finance as the lender is the owner of the car until you have repaid the finance agreement or paid the settlement figure in full.

It's actually illegal to sell the vehicle to a private buyer without informing them of the outstanding finance and can result in you being sued for fraud.

If you have a car on hire purchase HP , the lender remains the owner until the finance is settled or all payments have been made. Once you've obtained the settlement figure and paid it off, within a set period of time, the car will be yours to sell. Finance agreements vary significantly, therefore it's important to thoroughly check your paperwork to find out the terms and conditions of your particular contract.

If you try to leave your agreement earlier than six months this may have a negative impact on your credit rating, which can make obtaining credit difficult in the future. If you have a car on personal contract purchase PCP you can end the contract early through settling your outstanding finance amount as long as you've paid over half of the total finance amount, including interest and fees, to the lender.

Due to the final balloon payment, it is unlikely that you will have paid 50 percent by the mid-point of the contract. You can read more about this in our guide on cancelling your car finance early. 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.

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. 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. 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.

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. 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. We are nationwide. Nationwide car buyers. We have mobile vehicle purchasers nationwide, so selling your car has never been easier. Enter your postcode, town or city below to find your nearest purchaser.

We will buy any car Free car valuation. Sell my car online guide Sell my van. Sell your vehicle. Contact us. Although it's calculated by a slightly different rule now, the Rule of 78s still gives a pretty good indication of the amount that you're likely to be paying off. It's calculated like this. If you agreed finance for one year then that's 12 months. Each month is assigned a number with the first month being called 12, the second month 11, the third 10, etc.

This goes all the way down to 1. If you'd agreed two years then you would have started with The rule is used to calculate how much of each instalment you've made was used to pay off interest and how much was used to pay off the amount the car cost. When you pay off your settlement agreement you are paying off the car's value plus no more interest as you are finishing the agreement early. As such, you need to use a rule to figure out how much of what you have already paid off was just paying off the annual interest and how much was paying off the value of the car.

On this basis you can calculate that a large percentage of your first few payments will have only paid off interest, leaving you a certain amount of the car's value to pay off as a settlement amount. There are many different Rule of 78s calculators online including this one.