How to sell a van with outstanding finance
Selling a van that still has outstanding finance can seem daunting, but with the right information, it is usually a straightforward process. This guide will walk you through everything you need to know to successfully sell your van even if you still owe money on it.
Understanding outstanding finance
What is outstanding finance?
Outstanding finance means that the van you are selling is still being paid off. This usually involves a loan from a bank or finance company that was used to purchase the van, and until the loan is fully paid, the finance company technically owns the van.
Types of Finance Agreements
- Hire Purchase (HP): You pay a deposit and then regular instalments. The van is owned by the finance company until the final payment is made.
- Personal Contract Purchase (PCP): Similar to HP, but with lower monthly payments and a larger final balloon payment if you want to keep the van.
- Lease: You rent the van for a set period and return it at the end of the agreement.
Steps to selling a van with outstanding finance
1 Check your settlement figure
The first step is to contact your finance company and request a settlement figure. This is the amount needed to pay off the remaining balance on your finance agreement. It’s crucial to know this figure to understand how much you need to cover when selling your van.
2 Inform the buyer
Transparency is key. Inform any potential buyers that the van has outstanding finance. Most buyers will appreciate the honesty, and it avoids any legal issues later on.
3 Settle the finance
You have a couple of options here:
Pay off the finance yourself - If you have the funds, you can pay off the finance before selling the van.
Include the buyer in the process - Alternatively, you can arrange for the buyer, whether that is us, or someone else, to pay the finance company directly. The buyer pays the settlement figure, and any remaining amount goes to you.
We prefer to do it this way.
Once we have the settlement figure, we will pay the finance immediately and pay you the difference if we value your van more than the finance settlement. If the van is valued by us less than the settlement figure, you will have to pay us the shortfall first via bank transfer or credit/debit card and then we would settle the finance in full including your contribution.
4 Get a written agreement
If the buyer is paying off the finance directly, ensure you have a written agreement outlining the terms of the sale. This should include:
The settlement figure
The sale price of the van
The amount the buyer will pay to you
Any other conditions agreed upon
5 Complete the sale
Once the finance is settled, and you have agreed on the terms with the buyer, you can proceed with the sale. Make sure all paperwork is completed correctly, including the transfer of ownership. Here are some tips for ensuring a smooth transaction. First, it's essential to maintain clear communication by keeping the buyer informed throughout the process to prevent any misunderstandings or confusion. If you're uncertain about selling privately, consider using a reputable dealer who can manage the finance settlement on your behalf, providing added security and peace of mind. Additionally, be aware that some finance agreements include early settlement fees, so make sure to account for these costs in your financial calculations to avoid unexpected expenses.
6 Legal considerations
When selling a van, it's important to disclose any outstanding finance, as it is illegal to sell a vehicle with outstanding finance without informing the buyer. Additionally, make sure that the van's title is clear before transferring ownership to avoid any potential legal issues.
How to sell your van with us
Selling your van with outstanding finance may seem daunting but we can talk you through the process and take away all the hassle for you. To get started, request a valuation from us by entering your registration number and mileage here.
We will contact you and ask you to send us some photos. This is to make sure the offer we make is accurate. We will give you a unique quote that is tailored towards you and your vehicle, not a generic online value.
Next you need to ask for a settlement figure from your finance company. We deal with all finance companies. If you’re happy with our valuation and wish to go ahead, we can then take over and sort everything for you. Clearing the finance can take as little as 2 days but may take up to 1 week. Where the settlement is lower than our valuation, we will pay off the finance and then pay you the difference in to your bank account. We won’t take your van until the funds have cleared.
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