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Can I Sell a Financed Car?


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Can I Sell a Financed Car?

For a long list of reasons, drivers often sell their cars within a few years of buying them. A growing family could call for something more spacious, you may have your sights set on something a little more sophisticated or it could simply be that you have fallen completely out of love with what was once your ‘dream’ car.

All well and good, but what happens if the car you’re driving isn’t technically yours? If you have purchased a vehicle on finance and still have outstanding payments, are you allowed to sell it?

Can I sell a car with outstanding finance?

The short answer is no – selling a car with outstanding finance is almost always prohibited. Unless you receive formal consent from your finance provider (which is highly unlikely), you cannot legally sell the car…as it is not yours to sell.

This is one of many reasons why taking out car finance calls for careful forethought. Spreading the costs of buying a car over five or ten years of affordable monthly repayments is appealing, but you also need to consider the restrictions car finance brings into the mix.

One of which is the inability to sell your car, until you become its legal owner following full repayment.

What is a settlement figure?

A ‘settlement figure’ is the amount you would need to pay outright to pay off your debt and take legal ownership of your car. Most car finance specialists are willing to transfer ownership in this way – a kind of repayment agreement between the issuer and the borrower.

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If you would like to pay off your outstanding balance, you can request a written settlement figure from your lender, which will usually stay valid for 28 days. Pay this settlement figure outright and the car’s legal ownership will be transferred to you.

Can I sell a car with a personal loan?

Using a personal loan to purchase a car is different, as you are not technically taking out a car finance product. With a personal loan, your bank simply issues you a sum of money, which can be spent however you wish. Your debt is to your bank and concerns the money you borrowed – not the car you subsequently buy with it.

If you buy a car using a personal loan, you take full legal ownership of the vehicle the moment you buy it. This therefore means you are also free to sell the car at any time, or make modifications to it (also prohibited with vehicles purchased on finance).

Can I sell my car to pay off the finance?

Last up, this would seem like a fairly logical (and perhaps even sensible) option in some instances. If you struggle to keep up with your repayments or simply want to exit the agreement, why not sell your financed car and use the money to repay the balance in full? A solution where everybody wins, right?

Sadly not, as this is still prohibited with the overwhelming majority of car finance deals. The only option would be to take out a separate loan, use the funds to repay your car finance product and then sell your car to repay the third-party loan; a viable option, but one to consider only under the advisement of an experienced broker.

Craig Upton

Craig Upton supports UK businesses by increasing sales growth using various marketing solutions online. Creating strategic partnerships and keen focus to detail, Craig equips websites with the right tools to rank in organic search. Craig is also the CEO of iCONQUER, a UK based SEO Firm and has been working in the digital marketing arena for many years. A trusted SEO consultant and trainer, Craig has worked with British brands such as FT.com, djkit.com, UK Property Finance, Serimax and has also supported UK doctors, solicitors and property developers to gain more exposure online. Craig has gained a wealth of knowledge using Google and is committed to creating new opportunities and partnerships.


Scoopearth Team

Craig Upton supports UK businesses by increasing sales growth using various marketing solutions online. Creating strategic partnerships and keen focus to detail, Craig equips websites with the right tools to rank in organic search. Craig is also the CEO of iCONQUER, a UK based SEO Firm and has been working in the digital marketing arena for many years. A trusted SEO consultant and trainer, Craig has worked with British brands such as FT.com, djkit.com, Bridging Finance, Serimax and has also supported UK doctors, solicitors and property developers to gain more exposure online. Craig has gained a wealth of knowledge using Google and is committed to creating new opportunities and partnerships.

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