Can I scrap my car with outstanding finance?

Cars with outstanding finance can’t officially be sold for scrap. Before you agree to scrap your car, check the finance agreement to see if you’ll need to pay any money to the lender when the car is scrapped. Another option is selling your old car to a private buyer.

If you’re in a situation where you’re trying to sell a car with outstanding finance, it’s extremely unlikely that a scrap yard will buy the car. Legally they don’t have the right to do so, and not only that but they also won’t want to get involved in any disputes between two other companies.

If you’re in a situation where you’re trying to sell a car with outstanding finance, it’s extremely unlikely that a scrap yard will buy the car. Legally they don’t have the right to do so, and not only that but they also won’t want to get involved in any disputes between two other companies.

What is the legal implication of selling a car with outstanding finance?

The legal implications for selling a car that still has finance owing to a lender (or leasing company or hire purchase company) are complex and can result in prosecution for fraud. For this reason, it is essential that the vehicle is properly disposed of, for example by a dealer who is licensed to handle such transactions. If you do not know what to do and there appears little prospect of being able to settle the outstanding finance, then it may be simpler to sell the vehicle as a roadworthy vehicle.

Your car may be worth more than the amount outstanding on the finance contract or it may be worthless. To sell your car legally, first obtain a settlement quote from the finance company. If the car is worth more, you can then either sell it and pay off the difference to the finance company, or sell it and use part of the proceeds to settle the financing yourself. The best way to find out if your car can be sold and settled is to take it to a vehicle dealer.