Yes, you can sell a car that is on finance. But the outstanding balance must be settled before ownership can transfer to the buyer. This applies whether you are on a PCP deal or HP agreement.
Until the finance is paid off, the finance company technically owns the car (or has a legal claim on it). That means you cannot sell it without settling the debt first. The good news is that Brumble's recommended partner can handle the settlement for you as part of the sale, unless you are in negative equity.
Looking to sell? Sell your car via Brumble using our recommended partner. They handle outstanding finance as part of the sale.
The process for selling a financed car depends on the type of agreement you have. Here is how each one works.
| Finance Type | Do You Own the Car? | Can You Sell? | Key Detail |
|---|---|---|---|
| PCP (Personal Contract Purchase) | Not until the final balloon payment | Yes - dealers will often buy the car and settle the finance themselves | Positive or negative equity depends on car value vs settlement figure |
| HP (Hire Purchase) | Not until the final instalment | Yes - dealers will often buy the car and settle the finance themselves | You pay down the full value, so there is no balloon payment at the end |
| Personal loan | Yes, from day one | Yes, freely | The loan is not secured against the car, but you still owe the balance |
PCP is the most common type of car finance in the UK. With a PCP deal, you do not own the car until you make the final balloon payment at the end of the agreement. If you want to sell your PCP car before the end, you need a settlement figure from the finance company.
If the car is worth more than the settlement figure, you are in positive equity and you keep the difference. If the car is worth less than the settlement figure, that is negative equity, and you would need to cover the shortfall. Many online car buying services will settle the PCP directly with the finance company as part of the sale.
HP works similarly to PCP, but there is no large balloon payment at the end. Instead, you pay equal monthly instalments that cover the full value of the car. You do not own the car until the final payment is made.
To sell a car on HP, you need a settlement figure and the finance must be cleared before or during the sale. Because you are paying down the full value of the car from the start rather than deferring a chunk to the end, the way equity builds up can differ from PCP. Whether you are in positive or negative equity depends on how far through the agreement you are and how the car's value has held up.
If you bought your car with a personal loan, the car is legally yours from day one. The loan is unsecured, so it is not tied to the vehicle. You can sell the car freely, but you still owe the loan balance to the lender. You could use the sale proceeds to pay off the loan, or continue paying it separately.
If you are considering new finance for your next car, you can compare car finance deals via Brumble.
A settlement figure is the total amount you need to pay to close your finance agreement today. It is usually less than the remaining monthly payments added together, because you save on future interest.
To get your settlement figure, contact your finance company and ask for one. You have a legal right to request this under the Consumer Credit Act 1974. Most companies provide it within a few days. If you sell your car via Brumble's recommended partner, they will get the settlement figure for you as part of the process, so you do not need to do it separately.
Once you have your settlement figure, compare it to your car's current value. If the car is worth more, you are in positive equity. If it is worth less, you have negative equity.
Negative equity means your car's current value is less than the outstanding finance balance. This is more common with PCP agreements, especially in the first year or two when depreciation is steepest.
If you sell through an online car buying service, the sale price goes towards the settlement, but you would need to pay the difference out of pocket. In some cases, a lender may allow the shortfall to be added to a new finance agreement if you are buying another car. However, not all lenders offer this, especially if you are moving from one lender to another. It is also worth being cautious - carrying debt forward means you start your next agreement already owing more than the car is worth.
It could be worth getting your settlement figure and a valuation before deciding, so you know exactly where you stand. You might find that waiting a few months changes the picture if your car's value is close to the settlement amount.
If you sell via Brumble's recommended partner, they will get your settlement figure for you and handle the finance as part of the sale. If you would rather do it yourself first, contact your finance company directly - you have a legal right to this figure under the Consumer Credit Act 1974.
Selling a financed car is straightforward once you know the steps. Here is the process from start to finish.
For a wider look at all the ways to sell, including private sales and part exchange, read our guide to selling your car online.
Ready to sell your financed car?
Sell Your Car via BrumbleYes, you can sell a car on PCP. You will need a settlement figure from your finance provider. If the car is worth more than the settlement, you keep the difference. If it is worth less, you will need to pay the shortfall.
Yes, but the finance must be settled before or as part of the sale. Many online car buying services handle this for you by paying the finance company directly from the sale price.
Contact your finance company and ask for a settlement figure. They are required to provide this under the Consumer Credit Act 1974. It shows the total amount needed to close the agreement today.
Negative equity means your car is currently worth less than the outstanding finance balance. If you sell, you would need to cover the difference between the sale price and the settlement figure.
It is possible but more complicated. The finance must be settled before ownership can legally transfer. Most private buyers are wary of purchasing a car with outstanding finance, so selling through an online car buying service that handles the settlement is usually simpler.
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