Many people choose to finance their car purchase. This means they take out a loan to buy the car and then make monthly payments until the loan is paid off. There are a few things you should know if you’re thinking of buying a car on finance.
First, you’ll need to get a loan eligible check from DVLA. This will tell you whether or not you’re eligible for a loan. Second, if you’re planning to sell the car before the loan is paid off; you’ll need to get permission from the lender. Finally, if you’re buying a used car with finance, be sure to ask the seller for proof of the current owner’s finance agreement.
By keeping these points in mind and seeking guidance from trusted sources like Glens Falls Honda Dealer, you can navigate the car financing process with confidence and make informed decisions about your purchase.
By following these simple tips, you can ensure that your car-buying experience is smooth and hassle-free.
Four points that the seller has to keep in mind:
- Start from the fundamental things. As a seller, you are responsible to inform the finance company about the selling of the vehicle. Since they own a part of the vehicle. You should initiate the conversation with the finance company and ask for the settlement figure of the car. Once you inform the finance company, you can legally start with the other procedures to sell the financed vehicle.
- Although you own the car and you know the ins and outs, it is better to get an online consultation of your vehicle. As an owner, you should know the outstanding finance on the car before selling. Enter your reg number and get your vehicle finance check report. It helps you to know the type of agreement, date, agreement number, finance company and contact number.
- You can make the analysis by checking the vehicle financial status online. Fix the resale price of the car accordingly. If you are getting a decent profit, then you can go for the deal. If you find the cost (settlement figure) higher than your expected resale price, then you can hold the decision of selling your financed vehicle. Since it makes no sense in selling it.
- Be honest and straightforward to the buyer about the pending debt. If the buyer is still interested in the vehicle, he will take the necessary steps and check how much finance is left on the vehicle. After all, make sure you have all the relevant documents ready to sell the financed vehicle. Since it is a financed vehicle, people feel doubtful about buying your vehicle. If you have all the paperwork ready, it adds an advantage to your vehicle, which attracts people.
What are the documents you should have to sell the financed vehicle?
Be it a financed vehicle or a typical used vehicle; you should have the following paperwork to sell the car legally and stress-free. The buyer should be vigilant here and check the documents properly since it involves the ownership and outstanding finance on the car.
- Finance settlement copy
- V5C logbook
- Service history
- MOT certificate history
- Remaining car warranty
- Number plate retention form (V317) if applicable
- Car owner’s handbook
- Proof of reservation and purchase receipts
Can I ask the buyer to pay the finance company directly?
Yes, you can do that and settle the pending payment to the finance agency. You should have written confirmation from the finance company about the settlement figure and ask the buyer to pay directly to them once they finalize the deal. If the settlement figure exceeds the value of the vehicle, then you are the one who is responsible for the money shortfall. Thus the resale becomes unworthy here if the car value is less than the settlement figure.
Can you scrap a vehicle with outstanding finance?
It is similar to the previous case (selling a finance car to a prospective buyer), and here the buyer is the scrap yard. According to the DVLA, debt on the vehicle must be paid whether the vehicle is roadworthy or a scrapped one. You have to pay off the remaining amount before the scrap yard takes away the car. You have to follow the same steps that are above to scrap your financed car.
Answering your questions
1. Is it illegal to sell a car with finance outstanding?
Yes, it’s important to inform the buyer that you still owe money on it and without repaying the debt. Keeping the buyer in the dark will constitute fraud, and you could be prosecuted for it.
2. Can a dealer sell a car with outstanding finance?
A dealer cannot sell a car that has outstanding debt on it and it is considered illegal. If a car was purchased on credit, a settlement figure must be obtained from the finance company before it can be sold.
3. Can you go to jail for selling a car on finance?
Unless you have paid off the entire loan on a car, you cannot intentionally sell it. So, if you want to sell a vehicle on finance, you first need to make sure that all payments are settled. If you sell a financed car, however, you will not end up in jail.
4. How long does it take for finance to clear on a car?
When the finance house receives a payment, it normally takes up to 10 working days for the vehicle to be clear of finance but the length of time depends on the payment method and can vary from bank to bank.
5. How do you remove finance from HPI check?
To identify the best way to pay off the vehicle’s debt and ensure that you buy it debt-free, you must contact both the seller and the finance company.
