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Seems HP is actually a personal loan...what are my options?

edited 30 November -1 at 1:00AM in Loans
4 replies 3.9K views
ChickenStevensChickenStevens Forumite
6 Posts
edited 30 November -1 at 1:00AM in Loans
I bought a car from Arnold Clark in 2009 on what I thought was hire purchase. We are now looking at changing cars but the cars settlement figure is higher than the trade in value offered.

We were going to look in to VT under the halves and thirds rule but after a fruitless search for the finance companies T&Cs I found the Arnold Clark paper work which lists the finance as personal loan.
The finance is through Barclays Motor Finance.

Presumably because it appears to be personal loan and not HP this means I cannot VT?
If it is a personal loan does this mean I am free to sell the car as a private seller? If I did what could I do with the outstanding on the loan?

Current settlement is around £8250 and the cars trade in value at the garage we're looking to buy from is around £7k so just over £1k shortfall.

Can anyone advise me on what would be our best way forward if as its seems we cannot VT?

Thanks in advance


  • If its a personal loan it is not secured on the car, while HP is a specific kind of finance which is secured on the asset and gives the VT rights. If its a personal unsecured loan you are free to sell the car, settle the finance and buy another. Just don't fall in the trap of selling the car, NOT paying it off and thinking you'll just pay the monthly instalments and use the money for another car, as that's a dangerous game really. If its an unsecured personal loan and you sell the car, use the proceeds to pay that loan off. Check the paperwork carefully to see if it is an unsecured loan or if it has somehow become a personal loan secured against the car, in which case you can only sell it with the finance company's permission and be upfront with the buyer / settle the finance directly, as would be the case with HP, but if its not an HP agreement, you would not get the protection clauses of being able to terminate halfway into the agreement.
  • Ok, thanks.

    So first thig is should do is ring Barclays and find out whether the personal loan is secured on non-secured.
    If unsecured I can just sell the car privately and use they payment to settle the finance.
    If secured I need Barclays permission to sell it.
    That sound correct?
  • jonesMUFCforeverjonesMUFCforever Forumite
    28.9K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    A personal loan will not be secured on anything - a HP agreement will.
  • chanz4chanz4 Forumite
    10.3K Posts
    Part of the Furniture 10,000 Posts Name Dropper Xmas Saver!
    They may still put a marker on the car, same as some log book companys do
    Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.
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