Can I sell a car on finance? This is a common question among car owners who are looking to upgrade their vehicles or simply need to sell their current one. The answer to this question is not straightforward and depends on various factors. In this article, we will explore the possibilities and considerations when selling a car that is still on finance.
When you purchase a car on finance, you enter into an agreement with a lender, such as a bank or a finance company, to pay for the vehicle over a set period of time. The car is technically owned by the lender until the full amount is paid off. This means that you are the registered keeper of the car but not the legal owner.
So, can you sell a car on finance? The short answer is yes, you can sell the car, but there are some important steps and considerations to keep in mind:
1. Check the finance agreement: Before proceeding with the sale, review your finance agreement carefully. Some agreements may have specific clauses regarding the sale of the vehicle. It’s crucial to understand your obligations and the lender’s requirements.
2. Pay off the remaining balance: Ideally, you should pay off the remaining balance on the finance agreement before selling the car. This ensures that you are the legal owner and can transfer the ownership without any complications. However, if you cannot afford to pay off the entire amount, you have other options.
3. GAP insurance: If you have GAP (Guaranteed Asset Protection) insurance, it can help cover the difference between what you owe on the finance agreement and the car’s current market value. This can be beneficial if you’re unable to pay off the full amount and want to sell the car.
4. Part-exchange: If you’re unable to pay off the finance agreement, you can consider part-exchanging the car with the dealer. This means that the dealer will take the car as part of the deal when you purchase a new one. The dealer will then settle the finance agreement with the lender.
5. Selling the car privately: If you choose to sell the car privately, you’ll need to inform the lender of your intention to sell. They may require you to provide proof of the sale, such as a bill of sale or a contract of sale. Additionally, you’ll need to ensure that the buyer is aware of the finance agreement and that the car is being sold on a “sold as seen” basis.
6. Legal implications: It’s important to understand that selling a car on finance can have legal implications. If you fail to inform the lender of the sale or if the sale goes through without settling the finance agreement, you may be held responsible for the outstanding debt.
In conclusion, while you can sell a car on finance, it’s essential to follow the proper procedures and consider the financial and legal implications. Always consult with your lender and seek professional advice to ensure a smooth and hassle-free sale.
