Many motorists opt for driving their vehicles on finance, it’s a popular choice and one that leaves you with flexible options. However, when it comes to getting rid of a damaged financed vehicle, your options can become quite limited, especially if you have an outstanding balance. This article guides you through the different types of finance, and how to scrap your financed vehicle with National Scrap Car.
Can I Sell a Car With Finance
It’s vital that any outstanding finance is paid on the vehicle before selling or scrapping it. Selling a car with finance can be complicated at any time. And your options are restricted due to you not fully owning the vehicle. However, our expert team is here to help and can go through all options available to you. Some of our more specialist buyers can arrange to pay off outstanding vehicle finance and Pay you any difference when selling your car through our network. If the car is deemed to be end of life and to be scrapped with outstanding finance we would always encourage taking advice from your finance company in any instance.
How Car Finance Works
Getting a vehicle on finance allows you to pay for the vehicle over a period of time, instead of paying the full cost upfront. Finance allows you to pay the vehicle off in manageable installments, giving you options at the end of the agreement to either fully own the vehicle, exchange the vehicle, or give the vehicle back. There are many finance options, from personal contract purchase to hire purchase and leasing.
Personal Contract Purchase
For Personal Contract Purchase (PCP), you will usually pay a set deposit towards the vehicle’s cost, and then pay the rest of the balance in monthly installments. During the contracted period, the vehicle belongs to the finance company and at the end of the agreement you can either pay the remaining balance of the vehicle, exchange the car for a newer vehicle, or return the vehicle to the supplier altogether. The amount your deposit and monthly installments will be will depend on the value of the vehicle you’re financing. If you wish to keep the car at the end of the contracted period, you may pay a larger “balloon” payment.
For Hire Purchase (HP), you will usually pay a set deposit, and pay the rest of the balance in installments, similar to PCP. However, during the contracted finance period, the HP company will own the vehicle. After the agreed term, you will fully own the vehicle. The main difference between PCP and HP is with PCP you have options at the end of the term to either keep, swap or give back, with HP you will have paid off the vehicle and own it.
Leasing a vehicle essentially means you’re hiring it for an agreed period of time. With leasing you’ll never own the vehicle, and the payments made for the vehicle act as a renting fee.
Get a Quote for Your Financed Vehicle
If the car is being scrapped or disposed of, you can do this without settling your finances first however, we would strongly recommend speaking to them first.Speak to our expert team for more information and advice, 0800 86 20 958, or get a free, no-obligation quote in 60 seconds.