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Cars with outstanding finance against them can be a problem when it comes to private selling. Usually, buying a car from a dealer is safer because dealers will do background checks on the car. When you buy a car from a private seller, you won’t have any idea about the car’s history and will be going off what the seller is telling you. However, this doesn’t have to be the case and doing a history and finance check when buying a used car can help to avoid buying a car with outstanding finance. 

What is outstanding finance? 

Outstanding finance is really straightforward and is when the previous owner of the car sells the car, but they still has finance to pay on the car. Usually, outstanding finance happens on PCP or Hire Purchase deals because the finance is secured against the vehicle and the ownership of the vehicle belongs to the lender or finance company. It’s not as common on a car that was bought with a personal loan because it’s not secured, and the seller can use the money they get from the sale to pay off the loan instead.

man sitting thinking about outstanding finance

Why is outstanding finance on a car problematic for buyers? 

Buying a car which has outstanding finance can mean a large bill for you to pay. This is because the seller owes finance on the vehicle and has past the debt onto you. The car won’t belong to you either and you will owe the finance company the finance amount which is secured against the car. The lender will want their money back so it may be up to you to prove that you were not aware of any finance against the vehicle, and they will ask for more information on the sale too. The lender will want to know if you had no knowledge of any existing finance when buying and that you did not want to buy the car unlawfully.

How to check if a car has existing finance? 

There are a number of ways to check if a car has outstanding finances either before or after you’ve bought it. However, we recommend you always check BEFORE you buy the car as it could end up costing you. It can be hard to find a free finance check, but you can receive a full report for a small fee and extra peace of mind. We recommend using one of the below, reputable outstanding finance checkers:

  • RAC – Includes finance agreement details, MOT history, No. of previous owners and more for £14.99.
  • TotalCarCheck – Includes outstanding finance check, vehicle valuation, written-off check and more for £8.99.
  • CarAnalytics – Includes outstanding finance info, plate change history, high-risk vehicle and more for £9.95
checking if a car has outstanding finance

Don't get caught out!

Use our FREE used car buying checklist to make sure you’re getting the right car for you. 

Can you sell a car with existing finance against it? 

❌ NO – You do not have the right to sell your car if it has outstanding finance.

If you have a car through PCP or HP, the ownership of the car lies with the lender during the agreement. This means it is not yours to sell. If you wish to sell the car, you will first need to request a settlement figure from your finance lender and pay off the outstanding finance and any additional fees.

If you wish to sell the car at a dealership, it can be easier to do so. It is very common for cars to have existing finance and dealers will be familiar with this situation. As long as your car is in positive equity, you can use the value of the car to pay off the finance at the dealer and get a new car.


Can you part ex a car with existing finance on it? 

✅ YES – It can be possible to part-ex a car even if it has existing finance against it.

As mentioned above, if your car is in positive equity (when the car is worth more than the finance you owe) part exchanging your car is a simple process. You simply had the car over to the dealer and they pay off the existing finance with the value of your current car. You can then start a new finance agreement on a newer, better car if you wish. If your current car is in negative equity, it can still be possible to part-exchange your car, but you must be able to prove you can afford another car with a new loan. The negative equity can be ‘swallowed’ into your next deal but can make the deal more expensive.


Part Exchange your car with us today!

We can help you get a used car on finance and part exchange your old car in the process! 

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