You cannot sell a car with outstanding hire purchase (HP) finance
, as the lender is the legal owner of the car until the finance is settled.
To sell a car with outstanding HP finance, you’ll have to end your hire purchase agreement early. To do this, you’ll need to contact your finance company and ask them for a settlement figure.
Once you receive your settlement figure, you’ll have a set period of time to pay it off. Once you’ve paid it all off, the cars will be yours to sell. Can I return my car?
Check your contract for confirmation of whether you can return your specific car.
Generally speaking, you should be able to return the car if you’ve paid off less than half of your agreement’s total cost, provided you repay remaining instalments so you’ve paid for half the car’s value.
If you’ve already paid more than half the car’s total cost, which in both instances should include accumulated interest and additional fees, you probably won’t be able to return your car. Does your HP agreement have a voluntary termination clause?
If your HP finance agreement includes a voluntary termination clause, you should be able to return the car without making any additional payments. This shouldn’t affect your credit rating. Note that voluntary termination is normally only offered if you’ve paid at least 50% of the total cost. Will I have to pay an early exit fee on a hire purchase agreement?
Check your contract for mentions of early exit fees. Often, contracts specify you’ll pay 1% of your outstanding total, or 0.5% if you’ve got less than 12 months left on your contract.
You normally won’t have to pay interest, though some contracts specify you’ll pay interest rather than charges if you’re paying less than £8,000.