Can you sell a Vehicle on Finance

Mart34

Before anyone jumps to conclusions from the heading please read first, also if this is in the wrong part of the forum please can it be moved to the correct part.

I currently have a Car that's on finance, we have our 3rd child due in March 2017 and the vehicle is too small, I still gave another 3 years remaining on the finance agreement so was looking for some advice to save a phone call to the finance company.

Yes, I took the finance out on this particular vehicle, but as it is too small we ideally need something bigger. Would a finance company allow the sale of the vehicle, then once a more suitable vehicle is found have the finance agreement attached to the new vehicle. Effectively freeing the original vehicle free of finance?

rich13348

You can trade the vehicle into a dealer they will give you a trade in price minus your settlement figure from the leasing company. You can phone them and request that at any time.
You technically do not own a car on finance but you can sometimes, with the finance companies say so, sell the car as long as the finance is cleared on sale by the buyer and then you pocket the rest.

I am may be corrected on this, but I don't think you can sell a car on finance and have another car put in its place. The finance would have to be settled and a new finance agreement taken out on the new car.

The only way I have heard of a car being substituted on finance agreements us when a car is written off and GAP insurance is used to find a suitable alternative.

Jlawson118

I think you will still have to call the finance company as you may need permission, but my friend got a BMW on finance and ended up losing his job and he couldn't afford it, so he contacted them, and said he's welcome to sell the car and pay off the remaining debt.

Though he never did sell it as he found another job. All finance companies have their own rules though, and I know you don't want to, but I think a phone call would be best

Mart34

Hi
Thanks for your response. I assumed it wasn't possible to sell a car still in a finance agreement. I will give the finance company a call in the week, thanks for your advice guys

Mercdriver

Mart34 wrote: »

Hi
Thanks for your response. I assumed it wasn't possible to sell a car still in a finance agreement. I will give the finance company a call in the week, thanks for your advice guys

With three years still to run on your agreement, I doubt you will have any equity in the car. What you need to find out is what your settlement figure will be, and see if a dealer will put that debt in with a different car. You will need a decent credit record or the interest rate will cripple you.

Are you sure you can't manage with the car you have for another year/18 months when you might have some equity in the car? In the 70s there were 4 children in our family and we managed to fit in the back of a 70's escort.

If you were to sell the car, you would likely have to immediately pay the difference between sale price and settlement figure before they would allow the sale to go ahead. The alternative would be to take out a personal unsecured loan for the difference.

forgotmyname

Whats the car worth if you use a buy your car website and what do you owe on it?

RichardD1970

Mercdriver wrote: »

Are you sure you can't manage with the car you have for another year/18 months when you might have some equity in the car? In the 70s there were 4 children in our family and we managed to fit in the back of a 70's escort.

That was ok in the 70's .

I remember going on holiday from Birmingham to Cornwall, 6 kids and 2 adults on mattresses in the back of a Escort Van, oh and one of the drivers didn't have a licence :eek:.

The good old days, hey. :rotfl:

Muscle750

My son outlaw took his 2012 Peugeot 5008 back to Evans Halshaw its on Finance which is £230 a month He "paid" £11500 18 months ago went back this week...................offered him £6500 still owing some £8500. He aint a happy bunny. Did try and warn him as usual in one ear out the other

Mart34

We probably could manage for the next 18 month / 2 years as my son is reaching the age whereby he can start using a booster seat instead of the baby seat. Ideally I wanted to get something bigger like a Zafira or similar, not sure what the Insignia is worth, I think when I looked a few weeks ago it showed at something like £2,600, there's still approx £4,000 owed on the finance, (I.e, car + interest)

Like I said in a previous post I assumed it wasn't allowed,But I have sent an email to the finance company for their advice.

Thanks everyone, and Happy New Year

JP1978

Search for voluntary termination, assuming that you are on HP that is regulated by the consumer credit act 1974, your agreement will have this term written into it.

Basically, once you are at the half way stage of the agreement, you can (assuming that the car is in a decent condition commensurate with its age) hand the car back to the finance company with no further loss. if you are in negative equity, then that is the FA's issue and not yours.

People will say that this will affect your credit rating - while the finance company in question wont like it and will probably not serve you again anytime soon, as its a term written into the contract, it will not affect the rating.

I have never done it myself but believe that some people make a regular habit of it.

From Experian;

Ending a car finance agreement early using ‘voluntary termination’ is your legal right, as long as you’ve paid at least half of the total amount due and you hand the car back in satisfactory condition. You should then be left owing nothing and the lender should update your credit report to reflect this. The lender may also add a voluntary termination marker to the entry on your credit report which explains to other lenders why the finance was settled early. Your credit score should not be affected, as long as you have paid all of your monthly payments on time up to the point you hand the keys back, so you should not see any late payments registered. Lastly, unless any lender you approach has a policy of not lending to people who’ve opted for a voluntary termination in the past – and I’ve not seen any evidence of this – then it should not affect your chances of securing credit in the future. (January 2016)

Mercdriver

JP1978 wrote: »

Search for voluntary termination, assuming that you are on HP that is regulated by the consumer credit act 1974, your agreement will have this term written into it.

Basically, once you are at the half way stage of the agreement, you can (assuming that the car is in a decent condition commensurate with its age) hand the car back to the finance company with no further loss. if you are in negative equity, then that is the FA's issue and not yours.

People will say that this will affect your credit rating - while the finance company in question wont like it and will probably not serve you again anytime soon, as its a term written into the contract, it will not affect the rating.

I have never done it myself but believe that some people make a regular habit of it.

From Experian;

Ending a car finance agreement early using ‘voluntary termination’ is your legal right, as long as you’ve paid at least half of the total amount due and you hand the car back in satisfactory condition. You should then be left owing nothing and the lender should update your credit report to reflect this. The lender may also add a voluntary termination marker to the entry on your credit report which explains to other lenders why the finance was settled early. Your credit score should not be affected, as long as you have paid all of your monthly payments on time up to the point you hand the keys back, so you should not see any late payments registered. Lastly, unless any lender you approach has a policy of not lending to people who’ve opted for a voluntary termination in the past – and I’ve not seen any evidence of this – then it should not affect your chances of securing credit in the future. (January 2016)

Just a note to be clear though, 50% of the agreement is usually not 50% of the time through the agreement as timing depends on how much of the repayments go to pay the interest and how much of the repayments go to pay off the capital. It will be well beyond the 50% time period in normal circumstances. This is often misunderstood, and people are often disappointed that they can't VT at 2.5 years of a 5 year agreement term.