Advice needed, can I sell my car with finance on?

jax183

Hi

Just need some advice, would be grateful for anyone who could help!

In 2010 I took out a car finance deal, on a Renault. The agreement is now due to end and I have been given my options 1) hand the car back (dont want to do this as I will lose my deposit) 2) Part ex for a new vehicle 3) Refinance 4) Pay the balloon payment

Unfortunately in 2011 my circumstances changed (my marriage ended, which left me having to pay a mortgage and the bills alone) and I had to enter a debt management plan, so basically my credit rating is poor.

Since this time I have kept to the payments of the DMP, but obviously entering into the DMP will not have done my credit rating any favours. However, all my mortgage payments are up to date (never missed a payment in 7 years), as are the car payments (again, never missed a payment). I am now earning signifcantly more than I was in 2011 and am working hard to pay off the DMP, but I only have a small amount of savings for emergencies, as all my spare cash goes towards the DMP.

I have opted to refinance the vehicle as I cannot afford the balloon payment (5k) and am hoping to just refinance it, then pay it off in full next year when I have hopefully saved some money. However, I am not convinced I am going to pass the credit check for the refinance, and this is what is worrying me. I need the car for my job, so I just cannot hand it back, and obviously I dont think I will get finance for a completely new agreement on a different car either.

So, my question is, can I sell the vehicle to a garage? I reckon there is around £1500-£2000 'equity' in the car so I could just buy a cheap runaround, if any garage would do this. Is this is a possiblity at all given it has outstanding finance on it??

I am in such a mess, there is no way I can exist without a car due to my job, and I am petrified I am going to fail the credit check and have to hand the car back, leaving me with nothing.

At the moment I am even considering going to one of these companies that offers contact hire for people with bad credit, but I wonder if I am getting in an even worse situation doing this??


Thanks for any help!!

Chopper_Read

Have you spoken to your finance company and asked them?

jax183

Yes, I have spoken to them and the official answer they give is that "your vehicle cannot be sold until the finance is paid off". But having scoured the internet, I found a lot of people saying it might be possible to sell to a dealer, the outstanding finance to Renault is then paid off and I am given whatever is left over from the sale.

I think I shall pop into a couple of used car dealers and ask.

Chopper_Read

jax183 wrote: »

Yes, I have spoken to them and the official answer they give is that "your vehicle cannot be sold until the finance is paid off". But having scoured the internet, I found a lot of people saying it might be possible to sell to a dealer, the outstanding finance to Renault is then paid off and I am given whatever is left over from the sale.

I think I shall pop into a couple of used car dealers and ask.

That's true cause it isn't your car to sell. If you go to a dealer will the trade price clear your finance and give you anything back?

What's trade in price and how much do you owe?

forgotmyname

Ask a dealer and see what they offer. People do tend t overvalue their cars so
your £1500 - £2000 equity may not be the case when it comes time to sell.

Relentless01

Hi, the car can be px'd at a dealer and they will sort out the outstanding finance. You can not sell the car privately with finance outstanding. It is worth going to the dealer and asking them to try getting finance for you. Vehicle finance is accessed by underwriters who make a decision based on your past credit history. However if you have paid your mortgage and are update to date on your car payments you do stand a chance of being accepted again. It is important that you explain the issues to the Business Manager at the dealership as they will help.

mountainofdebt

Agree with what Relentless has said - we do this all the time for customers.

Also, as Relentless has said dealers also know which (legitimate) finance companies will finance those 'hard to finance' customers

motorguy

Relentless01 wrote: »

You can not sell the car privately with finance outstanding.

Not literally, no. However you can ask the buyer to pay the finance company and pay you the difference.

Its done all the time.

motorguy

jax183 wrote: »

At the moment I am even considering going to one of these companies that offers contact hire for people with bad credit, but I wonder if I am getting in an even worse situation doing this??

I would avoid the vultures in car dealerships who will exploit your situation and do their utmost to get you into more debt and at a stupidly high interest rate.

Ring your local Renault dealer, ask to speak to the person responsible for used car buying, give them the details.

Also, try we buy any car and their ilk. Remember to plug the details in accurately though.

OR advertise your car at a realistic price and once you have someone out looking at it, explain theres finance outstanding and they simply have to pay the finance company whats owed and you the remainder. Its no biggie.

If any of the above goes to plan, gather up what money you can and get yourself something like a cheap petrol focus with a years MOT. Try to ensure you're buying it off a private seller moreso than a dealer or worse - someone masquerading as a private seller. By buying private you've more chance of getting something honest and you'll get better VFM by cutting out the traders margin.

motorguy

mountainofdebt wrote: »

Agree with what Relentless has said - we do this all the time for customers.

Also, as Relentless has said dealers also know which (legitimate) finance companies will finance those 'hard to finance' customers

Are you seriously recommending that this guy gets into even more debt??

motorguy

O/P - it sounds like you've got a tight grip on your finances now after what i know is a terrible time through divorce, etc.

I definitely would be using this as an opportunity to owe even less by getting rid of a finance payment on a car, until such times as you can comfortably do so.