Selling a car with outstanding HP ???

Biggus_Dickus

If a person buys a used car on a 4-year HP deal, for example,  what are the general procedures that need to be undertaken and what are the legal/financial liabilities if said person wishes to ‘sell’ the vehicle after 18 months.

Presumably the outstanding loan needs to be paid off at some point,...but at what point in the time-line?

Also, who is the ‘registered keeper’ of a vehicle that is on a HP deal?;...is it the person who has taken out the loan?... or is it the loan company?

Sorry if I’m sounding a bit vague but I have no experience of used car HP deals and I’m trying to get a handle on the whole process.

All advice gratefully received.

DrEskimo

Depends who you sell it to.

Sell it on privately and you'll either have to clear the finance first, or come up with an arrangement with the seller. Generally much easier to settle first then sell.

If it's to a dealer or garage or WBAC type outfit then it's no more complicated. They will settle the finance for you as part of the sale. Any surplus goes to you, but any shortfall needs to be cleared at the same time.

Used car HP is rarely competitive though. Much better going for an unsecured loan. If you can't get a good rate then maybe take that as a sign that your not in the best position to purchase a car of that price and adjust accordingly.

Biggus_Dickus

OP here,...a bit of background is called for. I’m trying to help out my sister in law who is a bit worried about the situation her son finds himself in. I’m not best placed to offer her any meaningful help unless I get myself up to speed on the vagaries of used car HP deals. She relies on me for most things and I need to give some sort of support (such as it is) by way of the replies to this thread.

It appears that her son has purchased (18 months ago) a car for his girlfriend (who lived with him) using a 4-year HP deal. He already has a car that he owns outright and the car on the HP deal is driven exclusively by his girlfriend. i.e. he pays the loan company and she pays him back each month.

However, they now  no longer live together but are still boyfriend/girlfriend apparently.  She still has the car and he obviously still has financial responsibility.

The son has some difficulty making rational decisions and isn’t very forthcoming. He’s also liable to do something that’s perhaps not in his own best financial interest,... hence my sister in law needs to understand the ins and outs of selling the car whilst it has outstanding HP,...should it come to that.  

 

 

motorguy

Its quite simple to get a settlement figure to know whats outstanding on the car, that would the first step.

Also very simple for a buyer to simply ring the finance company and clear the finance.  They will issue an email with a covering letter saying they have now no financial interest in the car.  They will usually do that immediately.

Conversely, cars are making crazy money these days from the likes of We Buy Any Car.  I'd plug the details in there and see what they are offering (though they do chip the price back for any undeclared marks, etc).  Also, try the dealer he bought it off, or local dealers selling similar.  Theres also many online buying sites / companies to get a quote from.

Biggus_Dickus

OP here:  am I right in thinking that a car purchased using HP is legally ‘owned’ by the loan company until the loan is completely paid off?

Also,... is there an option that allows the customer to pay an early termination fee, or some such, and simply hand the car back to the HP loan company if the car is no longer required?

facade

Biggus_Dickus said:

Also,... is there an option that allows the customer to pay an early termination fee, or some such, and simply hand the car back to the HP loan company if the car is no longer required?

If it is definitely HP, then voluntary termination (VT) is an option, the car can be handed back when 50% of the total amount has been paid back, so it will cost roughly 6 months worth of payments as a cash payment to do this.  If it is actually PCP then VT is still possible, but the 50% figure is 50% of the amount payable, plus 50% of the final value of the car, and there will be a very large deficit to make up at 18 months.

Selling to the likes of WBAC as Motorguy suggests and if they offer less than the settlement figure paying the difference is possibly a cheaper option- they might even offer more than the settlement, so you keep the extra.

Biggus_Dickus

OP here:

Just out of interest I entered the cars details as accurately as I could into webuyanycar and they offered £10,160

However, the HP has now been paid off. The HP ‘settlement figure’ was literally just a few quid more than the webuyanycar offer.

Thanks for helpful replies @motorguy  @facade @DrEskimo,... much appreciated .