You can sell or trade in a car that still has finance on it, but only once the finance is settled. Until the lender has been paid what it is owed, the car cannot properly change hands, and any buyer who runs a history check will see the finance recorded against the registration. The way through is a settlement figure from your lender, and a buyer or a dealer willing to work with it.
Why can a financed car not just be sold on?
On a hire purchase or PCP agreement, the finance company keeps an interest in the car until the last payment is made. You are the registered keeper and you drive it, but the agreement stands between you and full ownership. Sell the car with the finance still running and the lender's interest travels with the car, not with you. That is why the history-check services record it. Cartell explains what happens to a buyer who ends up with such a car in its piece on buying a car with outstanding finance, and the AA's advice is blunt: do not risk buying a car with outstanding finance.
Any dealer will run that check before a figure is agreed. So will a careful private buyer. There is no version of this where the finance stays hidden, so the sensible move is to raise it first.
What is a settlement figure?
A settlement figure is the amount the lender needs to close the agreement now. You get it by contacting the finance company and saying you want to settle early. They send it in writing, usually with a date until which it holds good, and after that date you request a fresh one.
It is not simply your remaining monthly payments added together. Early settlement is worked out on the lender's own terms, and the figure on the letter is the only number that counts. CompleteCar's answer to a reader on selling a car with outstanding finance walks through the same first step.
Keep the letter. Whoever is buying the car will want to see it, and the figure on it decides how the sale is put together.
How does a trade-in with finance work?
This is the simplest route, because the dealer does the settling.
Tell the dealer at the start that there is finance on the car. The dealer takes the settlement figure from you, or from the lender with your permission, and puts a trade-in figure on the car in the ordinary way.
Then the two numbers meet. If the trade-in figure is higher than the settlement, the difference is yours and goes against the car you are buying. If the settlement is higher than the trade-in figure, you are in negative equity, and you cover the shortfall before the deal can close.
The lender is paid out of the trade-in figure, the lender confirms the agreement is closed, and only then does the ownership change. That order matters. It protects the dealer, and it protects you from your name staying on the finance for a car you no longer have.
If you are trading into RS Motors, say there is finance on the car in the first message and bring the settlement letter with the logbook. And if the car you want is not in stock, the car sourcing service can look for it while the settlement is being arranged, so the two can be dealt with in one deal.
How does a private sale with finance work?
Harder, because there is no dealer in the middle. Two ways are common.
Either you settle first. You pay the lender the settlement figure from your own funds, get written confirmation that the agreement is closed, and then sell the car clean. This is the tidiest route if you have the money to hand.
The buyer pays the lender. The buyer pays the settlement figure directly to the finance company and pays you the balance. It can work, but each of you is trusting the other, and the buyer's history check will still show finance until the lender updates its records. Do it only with the written settlement letter in hand and the payment made in a way both sides can prove.
What you must never do is take the buyer's money, promise to settle, and delay. Your buyer then has a car with a lender's interest on it, and you have a problem that gets worse by the day.
What paperwork will you need?
- The finance agreement, so the dealer or the buyer can see who the lender is.
- The settlement letter, current and in writing.
- The Vehicle Registration Certificate.
- The NCT certificate and the service history, as with any sale.
On a PCP near the end of its term, check that the settlement letter covers the final payment as well as the monthly instalments. It normally covers everything owed, but read the letter rather than assume.
Questions sellers ask
Can I trade in my car with outstanding finance in Ireland?
You can, provided the finance is settled as part of the trade-in. In the deal, the dealer takes the settlement figure out of the trade-in value, the lender is paid, and any balance goes towards the car you are buying. If the settlement is more than the trade-in figure, you make up the difference.
Can I do a trade-in if I still owe on my car?
Owing money on the car does not stop a trade-in. It adds a step. Get a settlement figure from your lender before you go to the dealer, bring the letter with you, and the settlement is worked into the deal so that the lender is paid before the ownership changes.
Can you sell a car on finance Ireland?
Selling a financed car is only right if the finance is cleared in the process. Selling it privately with the finance still running leaves the buyer with a car the lender still has an interest in, and the history check will show it. Settle first, or arrange for the buyer to settle directly with the lender against a written settlement figure.
Talk to RS Motors about your financed car
Get the settlement figure from your lender, then ring or WhatsApp 086 800 0001 with the reg, the mileage and the figure on the letter. RS Motors is open Monday to Saturday, 9am to 8pm, and the sell my car page explains what else to send.
