Selling a car with finance on it...question

[Mcbeth]

Basically, my wife's car is the first car we've ever got finance on so I've not done this before.
Come January, we want to get something a bit bigger and I'm happy to sell privately.
By then, there will be about £2500 remaining on the finance but the car is worth at least double that from a dealer or a private sale going on similar spec/history/ mileage etc.

I simply have no idea around the legalities around this.
Can I sell a car with finance on it assuming i pay it off as soon as the money is in the bank?
I need the wedge from the sale to pay it off so is it a catch 22? Or chicken and egg etc?
Am I obliged to tell the prospective buyer that it has some money left on it?
Any pointers would be much appreciated

[Terminator X]

HPI check will show the finance, best to come clean imho. Tricky to sell though as personally I'd avoid a car with finance still showing.

TX.

[magnitude12]

Finance needs to be settled 48 hours after the car has been sold. Explain the situation to the buyer saying finance will paid off on arrival of them buying your car. So when the buyer has sent the funds, whilst you're with the buyer, you can phone the finance company, wire the remaining funds to them and it'll be settled. Sorted!

[Rick101]

Can you clear it with a credit card payment or overdraft?

You'll get some interest but providing you sell within a month shouldn't be a great deal. Clearing the finance prior will help with sale.

[Pugland53]

I have done this quite a few times. Just ring the finance company and get the buyer to pay off the outstanding finance over the phone, the remainder in cash to yourself. That way you both know that the finance has been settled and the finance company can confirm via email/fax etc that they no longer have a financial interest in the vehicle.
Edited to say, actually as there is only £2500 owing on finance I would just pay it off on your credit card, sell the car finance free and pay off the card when you sell the car.

Edited by Pugland53 on Tuesday 25th November 04:39

[Jon1967x]

For a saga on what happens if it goes wrong look for the recent thread where the buyer paid the finance company, then decided not to buy and then a whole heap of confusion, suspicion and angst followed. I lost the will to live before the final outcome but font let somebody pay off the finance on your behalf until the cars been seen and you've shaken on the deal.

You need to come clean though if you can't clear it first, any potential buyer would think more favourably finding out from you than a hpi report.

[Mcbeth]

Thanks for the tips, I hadn't thought about paying it off with the credit card first....that's the best thing I reckon. Definately best to avoid the new buyer getting involved.
Cheers

[datum77]

If you advertise a vehicle and a potential buyer HPIs it, he/she will be told that it has outstanding finance on it. Straight away you have lost circa 50% of your buyers, because they are assuming that you are not being honest by not telling them.
ANY vehicle which has finance on it IS OWNED by the finance company until the debt is settled. That is right up until the very last payment. In reality you can sell the vehicle with finance outstanding but make the potential buyer very aware of the situation and settle the finance over the phone WITH THE BUYER IN ATTENDANCE.
If you go to a dealer to PX your old car, the dealer will make an allowance for the amount outstanding, and possibly add this debt onto the new debt which is the difference in value between your new and old vehicle. This assumes that there is a difference between the outstanding finance and the value of the vehicle, (This is YOUR equity, often used as your deposit on another vehicle). The biggest single mistake that people make when buying a car on finance is to find out 2 years or so down the line that the vehicle IS WORTH LESS THAN THE OUTSTANDING FINANCE. That is, they have no equity whatsoever in the vehicle. Stupid mistake, and usually made by people with no forward vision whatever.

[ging84]

Jon1967x said:

For a saga on what happens if it goes wrong look for the recent thread where the buyer paid the finance company, then decided not to buy and then a whole heap of confusion, suspicion and angst followed. I lost the will to live before the final outcome but font let somebody pay off the finance on your behalf until the cars been seen and you've shaken on the deal.

You need to come clean though if you can't clear it first, any potential buyer would think more favourably finding out from you than a hpi report.

That thread turned out to be a whole heap of fiction which when unravelled when the OP revealed what car it was, and someone got his reg off of facebook and HPI check showed it still had the finance owing when it was supposedly completely cleared