Car finance

[BountifulPantry]

Hi Mumsnet - very much in need of the hive mind.

My partner lost his job in October and has got a new one but it’s much lower pay. He is struggling to meet his car finance payment. We’ve looked into selling the car but I’m so confused about how this would work. It’s a secured loan against the car. Do we need to get permission from the finance company to sell.

I feel really dim not knowing how this all works. Has anyone done this?

You need to be able to pay off the full balance owed. You can sell the car if it's worth more than what is owed on the finance.

if it's a lease however, you cannot sell it as the car belongs to the dealership and you're just renting it.

if the car is worth less than what's owed on the finance then you will need to make up the deficit.
it all depends on how far into the agreement you are. If you're over half way you've got a chance but if you're under then you don't and you need to stick to the agreement as a rule of thumb
(worked at BMW sales many years ago)

as a starting point, find out what type of finance it is. HP, PCP or lease.
find out what's left, get a settlement figure.
find out what the car is worth.
then work out the figures

Get a settlement figure first.

Look at some car buying firms like WBAC, Carwow, Motorpoint etc and see what their valuation is. Bear in mind they will try to knock money off what they eventually offer you.

If the figures make sense you can sell. If a trade buyer like those I mention above buys it they will settle the finance in your name and pay you anything left over.

If you owe more than the car is worth you will have to fund the difference by paying the finance company direct.