Can you sell a car on finance? Everything you need to know

If you're interested in selling a financed car, you might be wondering, ‘is it even possible? And if it is, what steps are involved?’ The good news is that you can sell a car on finance even if it’s still under a finance agreement, such as a personal contract purchase (PCP) or hire purchase (HP) plan. In this article, we’ll guide you through the process and explain why selling your financed car to Arnold Clark is a smart choice.

Understanding outstanding finance

When you purchase a car on finance, the lender technically owns the car until all payments are made. This means that, if you want to sell your car, the finance needs to be settled first between you and the finance company. The process may seem daunting, but with the right information and assistance, it can be straightforward.

Selling a financed car on PCP finance

Personal contract purchase (PCP) is a popular car finance option. Under a PCP agreement, you make monthly payments for a set period, with an optional final lump sum, or ‘balloon’ payment, to own the car outright. Typically, PCP agreements are taken out if the owner looks to change their car every three to five years but if you want to keep the car to then sell it, here’s how you do it:

• Check your settlement figure

  The first step is to contact your finance provider to request a settlement figure. This is the amount needed to pay off the remaining finance. With PCPs, the settlement figure tends to be higher than other financial agreements due to the final balloon payment.

• Compare the settlement figure with your car's value

  If the car’s market value is higher than the settlement figure, you are considered to be in positive equity and you can use the sale proceeds to pay off the finance and keep any surplus. If the car’s value is less than the settlement figure, you’ll need to pay the difference before you can own the car.If the car’s market value is higher than the settlement figure, you are considered to be in positive equity and you can use the sale proceeds to pay off the finance and keep any surplus. If the car’s value is less than the settlement figure, you’ll need to pay the difference before you can own the car.

• Selling your car

  Once you have the settlement figure, you can sell your car. When selling to Arnold Clark, we can help settle the finance on your behalf, making the process seamless and hassle-free.

Selling a financed car on HP finance

Hire purchase (HP) finance is another common method where you make monthly payments. However, the difference between PCP and HP is that you own the car outright after the final payment.

Subsequently, HP finance usually requires higher monthly payments, but unlike PCP, there’s no final balloon payment required to own the car. This can mean the settlement figure is lower than other finance agreements since you’ve paid back more on the car over the course of the years you’ve had it.

• Get the settlement figure

  Like with PCP, start by contacting your HP finance provider to get the settlement figure.

• Market value vs settlement figure

  Determine if your car’s current market value covers the settlement figure. If it does, you can sell the car and use the proceeds to settle the finance.

• Selling your car

  If you choose to sell your car to Arnold Clark, we can handle the settlement process for you, ensuring that any outstanding finance is paid off and you receive any remaining balance.

Why sell your financed car to Arnold Clark?

Selling a car with finance might seem complicated, but Arnold Clark makes it easy. Here’s why you should consider selling your financed car to us:

• We help settle any outstanding finance

  At Arnold Clark, we take care of paying off the remaining finance directly with your lender. This eliminates the hassle and ensures everything is handled correctly.

• Easy and transparent process

  We provide a great valuation of your car free of charge both online or in branch, handle all the paperwork, and help settle the finance with your lender. You don’t need to worry about a thing.

• Competitive prices

  We offer competitive prices for your car, ensuring you get the best possible deal. Our transparent valuation process ensures there are no hidden surprises. Unlike some car-buying companies, we don’t have any hidden fees, so your final quote is what you’ll get.

• Expert guidance

  We’ve been buying cars since 1954, so we know a thing or two about helping our customers get a great price. Our experienced team is here to guide you through every step of the process. Whether you have questions about your finance agreement or need help with selling, we’re here to help.

How to sell a car with outstanding finance

1. Valuation:

   Start by getting your free online valuation for your car. This will give you an estimate of your car’s worth based on its make, model, age, mileage, and condition.

2. Book an appointment:

   Select an Arnold Clark branch at a time that suits you so we can complete a physical evaluation of the car and help you with any questions you may have.

3. Finance settlement:

   Provide us with the details of your finance agreement. We will help contact your finance provider to obtain the settlement figure.

4. Sell your car:

   Once we have the settlement figure and your car’s valuation, you can sell your car to us. If your car’s value is worth more than what the settlement figure is, you’ll receive the difference.

5. Receive payment:

   If there’s any remaining balance after settling the finance, you’ll receive payment directly from us straight into your bank account.

Your questions answered

Can I sell my car with outstanding finance privately?

Yes, but you’ll need to settle the finance before the sale is complete. This can be complicated, as the buyer may be wary of paying for a car that isn’t fully owned by you.

What happens if I sell a car with outstanding finance and my car’s value is less than the settlement figure?

You’ll need to pay the difference between the car’s value and the settlement figure. Arnold Clark can assist you in calculating this amount.

How long does the settlement process take when selling a financed car?

The process can vary depending on the finance lender, but Arnold Clark aims to complete the settlement as quickly as possible to ensure a smooth transaction.

Can I part-exchange my car when selling with outstanding finance?

Yes, you can part-exchange your car. The outstanding finance will be settled as part of the transaction, and the remaining amount can be used towards the deposit on your new car.

When I sell my car with finance, will settling my finance early incur any fees?

Some finance agreements may include early settlement fees. Check with your finance provider to understand any potential costs.

Ready to sell your financed car?

Selling a car with outstanding finance might seem complicated, but it doesn’t have to be. With Arnold Clark, the process is simple and stress-free. We handle the finance settlement, offer a great price for your car, and provide expert guidance every step of the way. Whether you have a PCP or HP agreement, we can help you sell your car quickly and easily.

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