Sell / part-ex car on finance

[matrignano]

Apologies in advance for the very mundane question.

2 years ago I took out a 5y straight loan secured against the car, which is registered in my name.
I'm now thinking of ridding myself of the car, do I have to settle the loan before selling/part-exing the car? Or can I sell/p-ex and then settle?

If it's option 1, as I don't have the funds to settle, does it mean I'm effectively stuck with the car and loan?

[Ari]

If you p/x the car the dealer will get a settlement figure and settle the finance as part of the deal. So if you're buying a car for £10,000 and your car is worth £5,000 and you owe £2,000 then effectively they're giving you £3,000 in allowance as £2,000 goes to the finance company so you'll need to find £7,000 to change.

If selling privately you need to set it up so that the buyer pays the outstanding finance off and then gives you the difference.

First thing to do is find out what you owe and what the car is worth to make sure that the value covers the loan. Otherwise you're stuck unless you can fund the difference.

[matrignano]

Thanks very much. I have positive equity on car vs. finance so that's not an issue.

[Ari]

Shouldn't be a problem then. Your part exchange allowance will be the normal p/x value of your car less the outstanding finance.