How to Sell a Car With Outstanding Finance

Yes, through a buyer who will pay the lender directly. You cannot sell privately. The car is owned by the finance company, not you, until the agreement is settled. Selling privately would mean transferring something you do not own, which is fraud, and the buyer can have the car repossessed.

The process is the same on most online car buyers:

• Get a current settlement letter from your finance company. This is a written figure showing exactly how much it would cost to clear the agreement today. Most lenders will email this within a few hours of you asking.
• Get a quote on the car. With SellCarInstant, enter your reg, mileage and a few details. Upload photos. The figure is locked.
• If the quote is higher than the settlement figure, you have positive equity. We pay the lender first to clear the agreement, and the difference goes to you.
• If the quote is lower than the settlement figure, you have negative equity. To sell, you need to cover the difference yourself.
• The car is collected or you drop it off in Bury. Funds are transferred to the lender and to you the same day.

Positive equity is when the car is worth more than the settlement figure. Example: settlement is £8,000, your offer is £10,000. We pay £8,000 to the lender, you get £2,000.

Negative equity is when the car is worth less than the settlement figure. Example: settlement is £8,000, your offer is £6,000. To sell, you pay £2,000 toward the settlement to clear the agreement. Once paid, ownership passes to us.

Most cars on PCP that are within the agreed mileage and condition will be in positive equity. Cars on HP nearing the end of the agreement are usually positive equity too. Cars early in a PCP, or with high mileage, often sit in negative equity.

• V5C logbook
• Driving licence or passport
• Settlement letter from your lender, dated within the last 30 days
• The finance agreement reference number
• Bank details for the equity payment, if positive equity

• Hire Purchase (HP): you own the car at the end of the agreement. Until then, the finance company is the legal owner. Once the settlement figure is paid, ownership transfers and the car can be sold normally.
• Personal Contract Purchase (PCP): same structure as HP except there is a balloon payment at the end. The settlement figure includes everything outstanding. You can sell at any point in the agreement.
• Personal Contract Hire (PCH or true lease): you do not own the car. It belongs to the leasing company throughout. You cannot sell a PCH car. If you need to exit a PCH lease early, contact the leasing company directly about early termination, or use a lease takeover service.

If you are not sure which type of finance you have, the agreement document will say. Look for the words hire purchase, personal contract purchase or personal contract hire.

• We pay the lender directly the same day, so there is no risk of funds going through your account and being used for something else. The settlement is cleared in one transaction.
• The price is locked when you upload photos. We will not reduce it on collection day for anything you have already declared and photographed. That matters more on finance cars because the figure has to clear the settlement.
• We pay from retail backwards rather than trade up. On cars in demand, that usually means more equity in your pocket once the settlement is paid.