The automotive world is a fast-paced one, with new models and technologies emerging constantly. If you’re someone who loves keeping up with the latest advancements, you might find yourself tempted by the latest offerings, even if you still have an existing car under finance.
But don’t worry, it’s not as hard as it might seem to sell a car with outstanding financing. Here’s a comprehensive guide to help you navigate the process:
Can You Sell a Car Under Finance?
Yes, you can absolutely sell a car that’s still under finance. While the terms of your finance agreement might make it seem like you’re locked in, you have more flexibility than you think The typical 5-year repayment period isn’t as rigid as it appears
What is a Car Finance Settlement Figure?
The settlement figure is the remaining amount you owe on your loan, minus the accrued interest. This is the figure you’ll need to know if you’re planning to sell your financed car.
Will a Car Dealership Settle My Finance?
Yes, most car dealerships will handle the settlement process for you This is a common scenario for people looking to upgrade or change their car before the finance term ends. Dealerships have extensive experience in dealing with financed cars, making the process smoother and more convenient for you
How to Sell Your Financed Car: A Step-by-Step Guide
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Get in touch with your financing provider, let them know you plan to sell the vehicle, and ask for a formal confirmation of the settlement amount.
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Obtain an up-to-date valuation for your car: Compare the settlement figure to the estimated value of your car. If the valuation is higher, you’ll have some surplus after the sale. You can use online valuation tools or consult a dealership for an accurate assessment.
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Get your car ready for sale by making sure it is clean on the inside and outside, has the correct paperwork, a service history, an MOT certificate, a spare key, and the V5C logbook.
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Make an appointment to finish the sale: Decide on a convenient time and place. Make sure you have all the paperwork and the settlement figure confirmation ready.
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Pay off the outstanding debt: The settlement procedure may differ depending on the buyer and the lender. Certain buyers may require you to settle it independently, while others may handle the settlement directly with the financing company.
Once the finance is settled, the car is officially yours to sell. You’ll receive the remaining balance from the buyer after the sale is finalized.
Selling Your Financed Car: Additional Tips
- Be transparent with potential buyers: Inform them that the car is under finance and provide them with the settlement figure.
- Negotiate the sale price carefully: Consider the settlement figure and your desired selling price to reach a mutually agreeable deal.
- Choose a reputable buyer: Opt for a trusted dealership or a private buyer with a proven track record.
- Get everything in writing: Ensure all agreements and transactions are documented to avoid any future disputes.
Selling a financed car can be a smooth and straightforward process if you follow these steps and keep these tips in mind. Remember, car dealerships are often the best option for handling the settlement process and ensuring a hassle-free experience.
Disclaimer: This guide provides general information and should not be considered financial advice. It’s always recommended to consult with a financial professional for personalized guidance on selling a car under finance.
What is a car finance settlement figure?
The amount you still owe on the amount you borrowed, less any interest still outstanding, is known as the settlement figure. If you intend to sell your car and it is currently financed, you will require this amount of information.
Can you sell a car which is under finance?
The usual 5-year period you have to pay it off isn’t as set in stone as you might think, despite the terms of your auto loan seeming to be locked in. The short answer to the above question is: yes, you can sell your car when it’s under finance.
It’s surprisingly simple and quick, but there are some precautions to take and steps to follow. It’s crucial to keep in mind that even though the title is in your name, the lender still owns the vehicle until the debt is paid off.
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FAQ
How do I settle my car finance?
What if I sell my car and still owe the bank?
Can you settle a car payment?
How do you win a car finance negotiation?
Will a car dealership settle my outstanding finance?
If you are unable to find this then the car dealership is unlikely to settle your outstanding finance. Car dealerships can cover your car finance. However, it is a complicated matter and you need to ensure that you are honest with them, providing accurate figures and following protocols.
Should you ask car dealerships to pay off your finance?
Once you know how much it is going to cost you to settle, it puts you in the perfect position to ask car dealerships to pay off your remaining car finance. You have got your settlement figure and you are ready to head to the car dealerships and ask them to settle your finance.
Should you settle your car finance?
You have got your settlement figure and you are ready to head to the car dealerships and ask them to settle your finance. However, there is one more thing you need to know before you get there, and that is about negative equity. After you purchase a vehicle, the value of it naturally decreases in most cases.
Can a car dealership pay off a loan?
In this case a car dealership may choose to pay off the worth of the car, e.g. the £9,000. This would leave you needing to find the extra £2,000 to pay off the rest of the loan. If you are unable to find this then the car dealership is unlikely to settle your outstanding finance. Car dealerships can cover your car finance.