Quick Answer
Selling a car that still has outstanding finance is generally not allowed — the finance company owns it until the debt is cleared. Doing so knowingly can breach your agreement and may amount to fraud. You must settle the finance first, or sell through a process the lender approves.
Who owns a financed car?
Under most agreements (HP and PCP), the finance company is the legal owner until the final payment. As the 'registered keeper' you can use the car, but you can't legally transfer ownership you don't yet have.
Selling it without settling the finance is a breach of contract, and if done deliberately to deceive a buyer it can cross into criminal fraud.
How to sell a financed car legally
- Ask your lender for a settlement figure
- Clear the finance before completing the sale, or
- Use the sale proceeds to settle the finance immediately
- Get written confirmation from the lender that the agreement is closed
- Only then transfer the car to the buyer
Check finance before you sell or buy
Confirm whether a car still has finance owing against it — check any UK registration.
Check finance before you sell or buyFrequently Asked Questions
Can I part-exchange a car with finance on it?
Yes. Dealers routinely settle outstanding finance as part of a part-exchange — they pay off your lender and deduct it from the deal. Always confirm the settlement in writing.
What happens if someone sells me a financed car?
The lender can repossess it, but as a private buyer acting in good faith you may have protection under the Hire Purchase Act. It's far safer to check for finance before buying.