Can I Sell My Car Privately With Outstanding Finance

Can I Sell My Car Privately With Outstanding Finance

4 min read Jun 29, 2024
Can I Sell My Car Privately With Outstanding Finance

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Can I Sell My Car Privately With Outstanding Finance?

The short answer is yes, you can sell your car privately with outstanding finance, but it's crucial to understand the process and the legal implications.

Here's how it works:

  • Contact your finance company. Before you list your car for sale, inform your finance company about your intention to sell. They will need to be involved in the process and will most likely have specific requirements.
  • Obtain a settlement figure. The finance company will calculate the outstanding balance on your loan, including interest and any other fees. This is known as the settlement figure.
  • Negotiate the sale price. Be transparent with potential buyers about the outstanding finance. Factor in the settlement figure when deciding on your asking price.
  • Complete the sale. Once a buyer is found, the buyer will need to pay the agreed-upon price. You then use that money to settle the outstanding finance with your lender.
  • Transfer the ownership. You'll need to complete the necessary paperwork to transfer ownership of the car to the buyer. This typically involves filling out a Vehicle Registration Application (V5C) and providing it to the DVLA.

Important Considerations:

  • Your finance agreement. Read the terms and conditions of your finance agreement carefully. Some agreements might have specific clauses about selling the car.
  • Early settlement charges. You might have to pay an early settlement charge if you pay off the finance before the agreed-upon term.
  • Buyer's payment. Make sure the buyer provides the full agreed-upon payment before you release the car.
  • Legal issues. Ensure you're following all legal requirements and are transparent with buyers about the outstanding finance.
  • Tax implications. Check if there are any tax implications associated with selling a car with outstanding finance.

Alternatives to Selling Privately:

  • Sell to a dealer. This is usually a less complicated option as dealerships have experience dealing with outstanding finance. You might receive a lower price compared to selling privately.
  • Part-exchange. If you're buying a new car, the dealership might be willing to take your existing car as a part-exchange. This can be a convenient way to settle outstanding finance.

In conclusion, selling your car privately with outstanding finance is possible, but it's a complex process that requires careful planning and communication. Consult your finance company for guidance and ensure you understand the implications of your actions.


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