Yes, you can sell a car with outstanding finance. The process is straightforward when you use a car buying service that handles settlements directly. We buy cars on HP, PCP, and other finance agreements, settle the balance with your lender, and pay you any remaining equity the same day.
Can You Sell a Car With Outstanding Finance
Legally, a car on finance does not fully belong to you until the final payment has been made. The finance company retains an interest in the vehicle until the agreement is settled. This means you cannot sell the car privately without first clearing the finance, as doing so could constitute fraud.
However, you can sell it to a buyer who settles the finance on your behalf. This is standard practice for car buying services and many dealerships. We handle the entire settlement process, contacting your lender, obtaining a settlement figure, and paying it directly. You do not need to find the money to clear the finance yourself.
HP vs PCP vs PCH — How Each Works for Selling
Hire Purchase (HP)
With HP, you pay a fixed monthly amount until the full cost of the car is covered. The car becomes yours after the final payment. If you want to sell before the agreement ends, the outstanding balance must be settled first. Once the finance company confirms settlement, ownership transfers to you and you are free to sell. If your car is worth more than the settlement figure, you pocket the difference.
Personal Contract Purchase (PCP)
PCP agreements have lower monthly payments but include a large balloon payment at the end. If you want to sell mid-agreement, the settlement figure includes the remaining monthly payments plus the balloon amount, minus any early settlement discount. Because of the balloon payment, the settlement figure on a PCP is often higher relative to the car’s value than on HP. Check your current settlement figure before requesting a valuation so you know where you stand.
Personal Contract Hire (PCH)
PCH is a lease — you never own the car. You cannot sell a vehicle on PCH because it belongs to the leasing company. Your only option is to return it or pay an early termination fee. If you have a PCH vehicle you want to get rid of, speak to your leasing provider about early return terms.
How the Settlement Process Works
The process is simpler than most people expect:
- Get your settlement figure: Contact your finance company and ask for a settlement quote. This tells you exactly how much is needed to clear the agreement. Most lenders provide this over the phone or through their app. The figure is usually valid for a set period, typically 14 to 28 days.
- Get a valuation from us: Enter your registration on our free valuation page. Let us know the car is on finance and share the settlement figure if you have it.
- We settle the finance: If you accept our offer, we pay the settlement amount directly to your lender. This clears the finance and releases the car.
- You receive the balance: If the car is worth more than the settlement, we transfer the difference to your bank account on the same day. If the settlement is higher than the car’s value (negative equity), we will explain your options before you commit.
What Happens With Negative Equity
Negative equity means your car is worth less than the outstanding finance. This is common with PCP agreements, especially in the early years when depreciation outpaces the payments you have made.
If you are in negative equity, you have several options:
- Pay the shortfall: You cover the difference between our offer and the settlement figure, then we handle the rest.
- Wait: Continue making payments until the settlement figure drops below the car’s value. This can take months or longer depending on your agreement.
- Negotiate with your lender: Some finance companies offer voluntary termination rights under the Consumer Credit Act. If you have paid at least half the total amount payable, you may be able to hand the car back without further liability.
We will always be transparent about whether negative equity applies and what your realistic options are. There is no pressure to proceed.
Selling to a Car Buying Service vs Settling Yourself
You could settle the finance yourself and then sell the car privately, but this approach has drawbacks:
- You need the cash upfront to clear the finance before you can sell
- Private sales take time — advertising, enquiries, viewings, negotiations
- The car continues to depreciate while you wait for a buyer
- HPI checks will show the finance until it is formally settled, which can put private buyers off
Selling to us removes all of these issues. We handle the settlement, collect the car, and pay you the same day. The whole process can be completed within 48 hours of your initial valuation. Learn more about how our process works.
Frequently Asked Questions
Will a finance check show on the car?
Yes. Any outstanding finance will appear on an HPI or similar vehicle check. This is one reason private buyers are cautious about purchasing cars on finance. When you sell to us, we settle the finance as part of the transaction, so it is cleared properly.
Can I sell a car on finance if I am behind on payments?
In most cases, yes. Arrears are added to the settlement figure. If you are struggling with payments, selling the car and clearing the finance can be a practical way to resolve the situation.
How long does the finance settlement take?
Once we pay the settlement, most lenders confirm clearance within three to five working days. The sale and your payment happen on the same day — the lender confirmation is handled in the background.
Do I need to tell you the car is on finance?
Yes, always. We run finance checks on every vehicle, so it will be identified regardless. Telling us upfront allows us to give you accurate information about equity and the settlement process from the start. Get your free valuation now.
