Selling a car on HP?

lazy&indebt

I currently drive a 206 which is on finance with Peugeot.
It costs me £150 per month and equates to half of my total debt.
I have owned it now for 2 years and 3 months so I have paid a fair whack off the finance... my total settlement figure at the moment is £4426.52
I have sent an email to the finance company to ask them about when I can hand it back and 'walk-away' so to speak (I believe it will be by January as this is when I will have paid off half of it) and by then I should have £500 saved for a new car.

Thing is, at the minute I know it's worth about £4,700 if I sold it privately (have seen the same car advertised for £4,900 and have allowed for some haggling) and if I did I would have £275 from the sale, plus £300 which i already have saved for a new car.

My questions is, how do I sell a car that's on HP? Do I need to get a loan first to pay off the HP so I can sell the car? Is it worth doing it now or should I wait another couple of months until I can hand it back, not get as much for it but save the hassle of loans and cleaning the darn thing?

angelavdavis

First thing is to check the T's and C's on the HP contract to see if you are allowed to settle the HP earlier than the original term.

Gillianh2

You need to check the contract very very carefully because it is usually against the law to sell a vehicle on HP without the companies consent. Aslo if any buyer had a HPI check on the car it would come back that the car was subject to a HP agrement and would almost certainly put the buyer off. As if you and I am in no way implying that you would, decided not to pay off the balance on the vehicle then the Finance Company could and would quite legitematly repossess the vehicle from the new owners.
So before you do anything further get the finance companies permission.

peb

If it is HP and not a loan then yes; you can hand it back and walk away once 50% has been paid - I am unclear as to admin fees etc on this figure but theoretically it can be done.

The problem with the HP means that you cannot sell it to a private individula; if you take it to a garage they will deal with the hp element and give you whatever is left over. However you will get less money for the car than with private. Theoretically you can sell it privately but you would have to convince the buyer of your honesty and that you will clear the hp debt - be careful if the buyer offers to deal with this as, in a worse case scenario, you could end up with no car but having the debt. The garages will hope to sell you a new car on another hp deal and keep you in the loop!

Good luck whatever you decide.

immoral_angeluk

A car on HP is not yours to sell as you don't own it until it's paid in full. You can however sell it if you have an agreement from the hp company.