If your car has finance or you have a hire purchase agreement, you will need to arrange to settle this before you can sell or scrap your vehicle unless the finance company has agreed otherwise. Until you have cleared this finance or come to another arrangement with the finance company, you are not legally able to sell or scrap your car. However you can finish your finance earlier than originally agreed.
Of course the ideal time to end a finance or hire purchase agreement is when the amount you still owe is lower than the price you can sell your used vehicle for.
If you are advertising your car for sale with finance outstanding you must inform the buyer that there is finance still outstanding and that you cannot transfer the vehicle until this has been cleared with the finance company. You cannot ask the potential buyer to take over the finance for you.
The first step to settle your car finance is to contact your finance company and ask them for a settlement figure which is a price for ending your agreement early.
Your finance company legally have to allow you to settle your finance agreement early. If you have any problems doing this please contact the government’s financial ombudsman service.
So now you’ve found out how much it will cost to end your agreement but may not be able to afford it. In this situation you may look into friends and family to help, getting a loan from the bank or 0% credit cards which when used correctly, can be cheaper than bank loans. A useful website for this is moneysavingexpert.com helping you to decide which 0% credit card to choose.
If your bank will not give you any credit then you can visit your local credit union to you, by entering your postcode, who will look into unusual circumstances.
Once you have cleared your debt are you are ready to scrap your car, visit Scrap Car Comparison to get your quote!