Can I Sell My Car with Existing Finance?

Lorem ipsum dolor sit amet news article image

Image credit:

One of the most common questions we encounter at WeBuyPrestigeCar is, "Can I sell my car with existing finance? The answer is yes, but it's not as straightforward as selling a car you own outright. There are several crucial factors to consider, but with our help, you'll soon have all the answers on selling a car with outstanding finance in the UK.

Understanding Car Finance

Car finance has become an increasingly popular method of purchasing a vehicle in the UK. It provides the convenience of spreading the cost of a car over a period of time, making it a more affordable option for many. However, the key thing to remember when you finance a car is that the finance company retains ownership of the vehicle until the loan is fully paid off. This ownership aspect can complicate matters if you decide to sell the car before you've completed your loan repayments.

Selling a Car with Outstanding Finance

While it's not illegal to sell a car with outstanding finance, if not handled correctly it's considered unethical and can lead to serious legal consequences. The finance company maintains a vested interest in the vehicle until the loan is paid off, meaning you'll need to settle the finance before or during the sale.

Settling the Finance: The Two Main Routes

There are two primary ways to settle car finance when selling your vehicle:

  • Pay off the outstanding balance: The most straightforward way to settle your car finance is to contact your finance company and ask for a settlement figure. This figure represents the total amount you owe, including any fees and charges. Once you've paid this amount, the finance company will release its interest in the vehicle, and you're free to sell it.
  • Sell and settle the finance simultaneously: If you don't have the funds to pay off the balance upfront, you can arrange for the buyer to pay the finance company directly. In this scenario, the buyer pays the settlement to the finance company, and any remaining funds go to you. This method requires a high level of trust and transparency between you and the buyer, and it's crucial to ensure all parties involved are comfortable with the arrangement.

Potential Pitfalls and How to Avoid Them

Selling a car with outstanding finance isn't without its risks. If the buyer discovers there's outstanding finance on the car after the sale, they could take legal action against you. To avoid this, it's crucial to be upfront and honest about the finance from the start.

Moreover, it's essential to provide all the necessary paperwork to the buyer, including the settlement confirmation from the finance company. This document serves as proof that the finance has been settled and the finance company no longer has any interest in the vehicle.

Frequently Asked Questions 

Will selling a financed car negatively affect my credit score?

Selling a car under finance will not necessarily harm your credit score. As long as the outstanding debt to the lender is fully settled, as per the agreed terms, your credit score should remain unaffected. To ensure this, you need to be aware of the payoff amount for your car loan and the current market value of your car. If the amount you owe is equal to or less than the car's worth, selling it should have no impact on your credit score. However, if the sale proceeds do not completely cover the debt, you can opt to refinance the remaining balance. While this may cause a temporary dip in your credit score; timely payments and ultimate settlement of the loan will prevent any long-term impact. Please note, settling an outstanding debt for less than the owed amount or voluntarily surrendering your car can negatively affect your credit rating.

Who legally owns a car that is under finance?

The legal owner of a car under finance is the finance company until the end of the finance term. Therefore, it is only permissible to sell the vehicle if the buyer has been informed about the outstanding finance. Selling a car under finance without disclosing this information to the buyer is considered illegal.

For more FAQs about selling your car with existing finance, check out our Frequently Asked Questions


Selling a car with existing finance is indeed possible, but it requires careful planning, transparency, and open communication. Always maintain a clear line of communication with your finance company and potential buyers to ensure a smooth and legal transaction. If you're unsure about the process, it's always a good idea to seek legal advice.

At WeBuyPrestigeCar, we have extensive experience in handling cars with outstanding finance. We can guide you through the process, ensuring everything is done correctly and legally. If you're considering selling your financed car, don't hesitate to get in touch with us.

Remember, honesty is the best policy when dealing with outstanding car finance. It protects you, the buyer, and the finance company, ensuring a fair and legal transaction for all parties involved. Selling a car with outstanding finance may seem daunting, but with the right knowledge and guidance, it can be a straightforward and stress-free process.

Looking to sell your car? Enter your reg and mileage below and start your free, no-obligation quote today! For more tips and advice, check out our blog or give us a follow on Instagram and Facebook