Getting a loan to sell car on finance

Galison

2 and a half years ago I got a car on GMAC finance to repay over 5 years ago, I have about £5000 left to repay. Problem is, it has 3 doors and I have recently had a baby and it's an absolute pain so I want to get something with a bigger boot, and 5 doors.

I asked Vauxhall (it's a corsa) about trading it in and taking out new finance but I'm in negative equity. They valued my car at around £3000. Looking around though I can sell it privately for £5000-£6000, and we buy any car will give me £4200! Vauxhall are being mean.

Problem is I can't sell it without paying off the finance first and I don't have the cash to do this until it's sold so I was thinking of taking out a loan to repay the finance, then pay the loan back using the money from selling. And taking out a bit extra to buy another more suitable, used car.

Has anyone ever done anything similar and can advise? Should I take out 2 separate loans since one I can pay off pretty much straight away when it sells? Is this possible or will there be a huge penalty.

Just looking for any bright ideas please! Thank you

foxy-stoat

The new purchaser can settle the finance on the day they buy it, be it private or trade sale - you have to make sure you can pay the difference at the same time though.

Just put in the advert that it has outstanding finance and keep the settlement letter handy when they come to collect, some people will be put off but others wont be.

Galison

So. It has £5000 left to pay, it's worth say £5500. So I advertise it for £5500 but instead of paying it to me, I'd get £500, the give the other 5000 to GMAC? Is that right?

foxy-stoat

Galison wrote: »

So. It has £5000 left to pay, it's worth say £5500. So I advertise it for £5500 but instead of paying it to me, I'd get £500, the give the other 5000 to GMAC? Is that right?

You call up the finance company quote your reference number and go through the security, hand the phone to the buyer and pay them £5000 over the phone, hand the phone back to you and wait for confirmation that the finance is clear - they will email you once its done, have your computer and emails open, take the other £500 cash and sign the vehicle over to the new owner as normal. Give them a receipt which details that they have paid whoever the £5000 and you the £500.

You would already have asked for a settlement figure first, have the letter in your hand before they come to buy it. They really should of HPI'd the car themselves so they know who the lender is along with the reference number etc so they can see it is not a scam.

This may put the average private buyer off due to the amount of scams out there, but for some people its safer than having £5500 in cash when buying a car.

Gaz83

Bear in mind that attempting to sell a car privately with outstanding finance severely limits the number of potential buyers out there. A lot of people can't be bothered with the hassle just in case something goes wrong.