Have you recently thought about selling your car? Maybe you need the extra cash or you are looking to swap vehicles. Perhaps the kids have moved out and you no longer need as many seats, or you're expecting a new baby and could do with a little more room in your car. Whatever reason you're looking to sell your car, you might think you're unable to, if you bought it on finance. Can you sell your car if it still has money owed on it. How to sell a car on finance? Keep on reading motor fan!
How to sell a car on finance?
Did you know that over 85% of cars bought in the United Kingdom, are purchased with some sort of finance agreement. This could be leasing the car, a personal contract purchase (PCP) or something similar. When you buy your car with finance, you don't technically own the car. The vehicle is owned by the lender, even though your name is on the paperwork. This remains in place until you have paid off all of the owed balance. With this in mind, if you still owe money to the finance company, are you able to sell your car and the ultimate question is how to sell a car on finance? Well, the good news is that you can sell your car, however you need to be in a certain situation and hit certain requirements which vary by lender.
Why are you selling?
Ask yourself why you are selling. Do you really need to sell? Is there another way? You've made all these payments on a car you clearly wanted in the first place so why are you wanting to sell? Asking yourself how to sell a car on finance is all well and good but do you actually want to sell? Is there another way to do things? If you need another car you might be able to simply switch the car for another one with the same finance company.
Your payments might go up or down depending on the car you switch to but it will save time in paperwork. You might even get better rates because you've been a customer with them for a while. If you need your car to travel to work, selling your transport is likely the last thing you want to do. Will it effect your current role? Is there another way to get the cash you need instead of selling your vehicle?
Settle the finance
You need to settle the remaining finance on the vehicle before you sell the car. You need to have paid off 50% or more of the amount borrowed, to then ask to end the finance agreement through something called a voluntary termination. This would be the first step to selling your vehicle and you could simply hand the car back with no more payments needed. Speak to your finance company about doing this. If you want to sell your car privately, you need to get your car paid off in full. This would mean that it's yours, 100%, to do with what you like.
If you have someone interested in the car, you need to find a way to settle the remaining finance. This could be borrowing some cash from a loved one for a week, to pay off the finance, then repay that money once the seller has given you the cash for the vehicle. If you end your agreement early or pay off the money early, you may have to pay an early exit fee which could be 1% or similar. The bottom line and the answer to your question is that you can sell a car on finance. You just have to make sure you do it correctly. This might even mean asking the company itself how to sell a car on finance.
If you have bought your car with a personal loan from a bank, the car is yours. You will still have to pay off the personal loan, however you can do with the car what you like.
Speak to the finance company
If you find yourself in a situation of financial difficulty, speak to your finance company. So many of us can easily find ourselves struggling but there is help. Finance companies deal with customers facing issues all the time. There might be something they can do to help, rather than you having to sell your car in order to get some money for bills or something else. You might be able to apply for a payment holiday. The finance company might be able to adjust your payments over a different time period so your payments are slightly more manageable every month, giving you a bit of spare cash for where you need it. This would help you keep your transport whilst freeing up some cash.
You don't know what can be done until you ask. They might not be able to do anything but if you don't ask you'll never know. Pick up the phone, be honest about your situation and see what they can do to help.
Top tips for buying a new car
If you are looking at buying a new car, there are a few things to remember.
Firstly, shop around for the best deal. Different garages and showrooms will be able to offer different packages. The car you have your heart set on might not necessarily be the best option for you. Car salesmen tend to get a bad press. However, they know what they're talking about. don't be afraid to take your time when looking for a new car. You don't have to necessarily buy a new car, just a new one to you. You can get great deals on second hands cars or vehicles with just a few miles on the clock.
Whatever you're looking for in terms of a new vehicle and for whatever reason you're looking at selling your car, there are ways and means of working things out so you get the best deal. Take your time, shop around, do your homework and work on those finances. Don't forget to simply talk to your finance company. They might have a solution right there for you, saving you lots of stress and tears.