Though the selling and buying of used cars have become common these days through various platforms, selling a financed one is a little tricky. You should make the buyer, the finance company and most importantly, yourself happy and satisfied after the deal. As a buyer, the very first thing you have to check is the outstanding finance on the car.
Other significant checks involved before used vehicle purchase.
What steps you have to take as a seller to sell the financed car?
Selling a used car with finance is different from the usual decision. If you are going to sell a used vehicle, it is only between you and the buyer. But it also involves the finance company as the third party when it comes to a financed vehicle. Hence the steps involved are a little unusual from the regular used car purchase. You can make it a little easy with a car finance check. It tells you the financial status of the vehicle.
However, nothing is there to panic about the purchase and selling from both ends. Also, the extra steps are not as complicated as you think. Let us get into the blog to know the steps involved in selling and buying a used vehicle. Since buying a car with the outstanding finance is not a joke.
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 in any vehicle checking services online and vehicle finance check. It helps you to know the type of agreement and the amount that has to be repaid by you or the buyer.
- After checking the vehicle financial status online and the current condition of the vehicle, you can make the analysis. 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. According to the gov of the UK, It is illegal to sell a vehicle with finance. Tell the prospective buyer that the car has an unpaid debt on it. If the buyer is still in love with 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 skeptical 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.
- The V5C document of the vehicle is sometimes proof of ownership (it will have the registered keeper name). Make sure the logbook is original by checking the watermark of the DVLA.
- The service history of the vehicle to know how well the car has been maintained in the past. You can also run a free car check to know the service history of the vehicle indirectly.
- MOT history of the vehicle is also essential as a part of your paperwork. A vehicle check will help you know the vehicle’s complete MOT history and an instant online report.
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.
Hence it is essential to check if a car is on finance and the amount against it before selling the financed car.
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.
To conclude, there are potential pitfalls where you might get trapped buying a financed vehicle. But with the finance check from car analytics, you will get to know the complete financial status of the vehicle. You will also enjoy the benefit of getting it at a fair price, primarily as it is a financed vehicle. If you are the buyer, then make a vehicle finance check and know thoroughly about the car before getting into the deal.
Overall from a car check, the deal is going to be a win-win situation for both parties.