Short answer: yes, once the finance is settled. If you have hire purchase (HP) or a similar agreement, the finance company owns the car until you have paid everything you owe. You cannot sell it as if it were yours until the debt is cleared, but you can arrange for it to be paid off as part of the sale.
Step 1: get a settlement figure
Ask your lender for a settlement figure. This is the amount needed to close the agreement. It is usually valid only for a limited time, so check the date. It may differ from the balance you expect, as it can include remaining payments, charges and fees.
Step 2: compare it with what the car is worth
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Positive equity. The car is worth more than you owe. You clear the debt and keep the difference.
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Negative equity. You owe more than the car is worth. You will need to cover the shortfall to settle.
Check recent adverts for similar cars to estimate the value.
Step 3: choose how to sell
Sell to a dealer or part-exchange. The dealer pays off the finance and gives you the balance, or you pay the difference. This is usually the simplest route.
Sell privately. Possible, but you need to make sure the lender is paid. Common approaches are:
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You pay off the finance first using your own money, then sell the car
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The buyer pays the lender the settlement amount directly and pays you the remainder, with everything in writing
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Meeting at the lender’s branch if there is one, or using a secure method agreed by both sides
Always tell the buyer about the finance and give them written confirmation from the lender once settled. A buyer who runs a finance check will find it anyway.
Step 4: make sure it is settled
Get a letter or confirmation that the agreement has been paid off, and keep it. Complete the V5C change of keeper with the buyer, as explained in our V5C guide.
Do not sell a car with outstanding finance without clearing it and telling the buyer. The buyer could lose the car, and you could face a claim, a criminal investigation or action from the lender. Do not hide the finance, even if the buyer does not ask.
Other options if you cannot afford to settle
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Voluntary termination. If you have paid at least half of the total amount payable under an HP or conditional sale agreement, you may have a right to end the agreement and hand the car back. Check the details with your lender.
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Talk to your lender. They may agree a plan if you are struggling.
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Get free advice from Citizens Advice, StepChange or MoneyHelper.
If your car is leased, for example on a personal contract hire, you do not own it and cannot sell it. Speak to your leasing company about ending the contract.
Frequently asked questions
Can I sell a PCP car before the end of the agreement?
Yes, if you settle the amount owed. Your settlement figure includes the final payment, so compare it with the car’s value.
Does the buyer need to know about the finance?
Yes. Be honest, and give them written confirmation that it has been cleared.
Will the finance show on a history check?
Yes. Outstanding finance is what a finance check searches for, which is why buyers run one.
How long is a settlement figure valid?
Usually for a limited period. Your lender will tell you the date.
Read Can I buy a car with outstanding finance?. And if you want to see what a buyer will see, run a free check on your own car at carverified.co.uk.