Can you sell a car if you still owe money on it?

Thinking about selling your car but still owe money on it? You’re not alone – and yes, it is possible. But there are some important rules to follow.

Here’s what you need to know

Can You Sell a Car With Outstanding Finance?

If you bought your car on finance, you don’t legally own it until the last payment is made. The finance company does. So you can’t just sell it without clearing the finance first.

Trying to sell a financed car without sorting the finance can land you in legal trouble. But if you follow the right steps, it’s completely doable.

How to Sell a Car on Finance (The Right Way)

1. Ask for a Settlement Figure

Contact your finance provider and ask for a settlement figure. This is the total amount you need to pay to clear your finance. It’s usually valid for 10 to 30 days.

2. Pay Off the Finance

You have two options:

• Pay the settlement figure using your own money
• Use the buyer’s payment to clear the finance directly

If you’re selling privately and using the buyer’s money to pay the finance, be upfront. It’s best to call the lender and pay it off while the buyer is there.

3. Get Written Confirmation

Once the finance is paid, ask your lender for a letter confirming the debt is settled. This shows the car is legally yours to sell.

4. Now You Can Sell

With the finance cleared and proof in hand, you’re free to sell the car—either privately or through a dealer.

Can You Trade in a Financed Car?

Yes. In fact, it’s often easier.

Dealerships handle this all the time. They’ll:

• Contact your lender for the settlement figure
• Pay off the finance as part of the trade-in
• Use any leftover value as a deposit for your next car

If your car is worth less than what you owe, you’ll need to cover the difference or roll it into your new finance deal. Ask the dealer to explain your options clearly.

Risks of Selling a Financed Car Privately

Selling privately can sometimes get you a better price, but it comes with a few risks:

• Buyers may be wary. Many won’t touch a car with outstanding finance.
• You’re legally responsible. Selling a car you don’t own can cause serious problems.
• The process is more complex. You need to handle finance settlement and the sale at the same time.

To stay safe, always settle the finance first.

What If You Can’t Afford the Settlement?

If you’re looking to sell because you’re struggling financially, don’t panic. You have options:

• Speak to your lender. They might offer lower payments or extend your agreement.
• Refinance. Another lender might give you better terms.
• Trade down. Switch to a cheaper car and roll over the balance.

Just don’t ignore it or try to sell illegally. Being upfront leads to better outcomes.

Final thoughts – Selling a Financed Car

You can sell a financed car—just follow the steps:

• Get your settlement figure
• Pay off the finance
• Get proof from your lender
• Then sell or trade in your car

If you’re short on options, talk to your lender or look at refinancing.

Need help finding a better car finance deal? Motorly can help.

Check your finance eligibility today and see what you could save.