Can I sell a financed car?
If you’re still paying off finance on your car, you’re unable to sell it until it’s fully paid off
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While you might have your eye on a new model, if your car is on finance, you can’t make a quick switch by selling. The reason is simple – while you’re still paying off the finance agreement on your car, it’s not yours to sell! You’ll need to settle any outstanding car finance and become the official owner before you sell your vehicle, otherwise you’ll run into some legal trouble.
Learn more about financing a car with cinch on our car finance page.
Can I sell a car on finance in the UK?
With Hire Purchase (HP) and Personal Contract Purchase (PCP) finance agreements, you’re not the official owner of the vehicle until you’ve either paid all your monthly instalments or have paid an early settlement fee. With Personal Contract Hire (PCH) car finance, you’ll never be the owner of the car.
To sell your finance car, you’ll need to pay the settlement fee on your contract to become the full owner. Sometimes, you’re able to get a dealership to handle this for you. They can give you a price to buy your car and pay the settlement fee out of that total, so you’ll get whatever’s left over.
It’s important to always check with your lender before going ahead to make sure this is allowed with your contract.
Can I sell a car on PCP finance? Personal Contract Purchase explained
Unless you’ve paid the full balance of your contract, you can’t sell your car. This is especially true with PCP agreements as you’ve only been covering the depreciation amount of your car across your monthly payments, and the rest is paid in the balloon payment at the end of your contract. Until you’ve paid up, you don’t own the vehicle and can’t sell it.
The balloon payment at the end of your contract is optional, so you could just choose to hand your car back and pick out a new one rather than selling it. There’s also the possibility to use any equity from your car to pay towards the value of a new one.
If you no longer need your car and that’s your reason for wanting to sell, you could choose a ‘voluntary termination’. This allows you to hand back your car and end the contract early, but only if you’ve paid 50% of the contracted amount. If you haven’t met the 50% mark yet, you can pay the difference.
Can I sell a car on HP finance? Hire Purchase explained
As with PCP, you can't sell a HP finance car if you haven’t finished the payments. As soon as your contract comes to an end, you can do whatever you’d like with your car as you’re now the official owner. Until that point, you’d have to end your contract early and pay a settlement fee to be able to sell, as the lender is still the official owner.
If you don’t want your car anymore, you can get a quote for that settlement fee and pay it off to end your contract, or you can take a voluntary termination if you’ve paid more than 50% of the finance. As with PCP finance, you’ll need to pay an added fee to reach the 50% mark if you haven’t paid that much. This can be done in one lump sum, and then you can hand the car back.
With both HP and PCP car finance, you should check your contract for details on ending your contract early to make sure you’re clear on the terms. If you get stuck, your lender will be happy to help you figure out the details.
When can you sell a car on finance?
You can sell your finance car if you’ve reached the end of your contract and have covered all outstanding payments or have paid a settlement fee to end your contract early. Up until this point, you're not the legal owner of the car, and it would be illegal for you to sell.