Loan to pay off car finance

Branwen2010

I am in the process of applying for a loan to pay off my existing car finance. I have never missed or made a late payment on the finance but need to sell the car. I know I can't sell it with outstanding finance on it so a loan is the only way. When applying for the loan is it best to select "debt refinancing" or "car loan" as the reason for the loan? Does it matter?

BoGoF

How much of the finance agreement have you paid off. If you've paid 50% of the finance you may be able to terminate the agreement and give the car back.

Branwen2010

I've got £3000 outstanding and the car is worth around £6000. I really want to be loan free so the plan is to borrow £3000, pay off the finance, sell the car and then pay off the loan. I have found a Post Office loan with no early repayment clause. I can then by a run around with the money left!

BugsyBrowne

BoGoF wrote: »

How much of the finance agreement have you paid off. If you've paid 50% of the finance you may be able to terminate the agreement and give the car back.

How much was the finance on the car and how much do you need to borrow?
Have you any other debts credit cards etc if so what are their balances?

Branwen2010

The original car finance was £5000 and I owe £3000. I don't have any other debt.

kleapatra

Why don't you just sell the car, get the buyer to pay directly to the finance company (so they know it's been cleared) and then the finance company will refund you any excess- would be much simpler than taking out more finance I think

Branwen2010

Is this possible? If it is, it's definitely worth a try! Thanks!

yorkshire-lad

With regards to what kleapatra said, be careful.

The cars isn't yours to sell at the moment.
You need to speak to the finance company,if you sell it you could be breacking the T&Cs of your agreement.