Verify Outstanding Car Finance:
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Enter your registration number to verify an outstanding car loan
(Example, KX63 TWF)
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What is Outstanding Vehicle Finance?
Outstanding vehicle finance refers to unpaid loans or leases tied to a car. Legally, the lender retains ownership until the debt is settled. Knowingly selling a financed car without clearance is illegal under the Consumer Credit Act 1974.
Learn how to check for outstanding finance, understand different types of finance agreements, protect yourself when buying or selling, and manage or resolve existing finance effectively.
CarVeto vehicle history displaying a loan secured against a car
How do you check if a car is on Outstanding Finance?
Checking for unresolved debt is essential when buying a car. Follow these simple steps to ensure the vehicle’s financial safety:
- Enter the vehicle registration number. Use our finance checker to retrieve financial details.
- Review the financial history: Look for hidden risks, such as accident damage, mileage fraud, theft, or unresolved loans.
- Confirm the vehicle is debt-free: Ensure no outstanding loans or liabilities are attached before making a purchase.
This process provides peace of mind, ensuring the car is a safe and worthwhile investment. Run a CarVeto Car Registration Check to get started.
What are the Different Types of Unsettled Vehicle Finance?
Car finance liabilities vary and include hire purchase (HP) agreements, personal contract purchases (PCP), and leased vehicles.
According to Statista, 1.46 million used cars and 623,300 new cars were purchased on finance from June 2023 to May 2024, highlighting how prevalent financing is in vehicle ownership.
What Happens if I Buy a Car With Outstanding Finance?
If you accidentally buy a car with outstanding finance and are unaware of the debt, you may have the right to retain ownership under ‘good title.’ This term applies to purchases made in good faith without prior knowledge of a loan secured against the vehicle.
Car buyer rights
The finance company will typically seek to recover their money, and it’s their responsibility to prove that you don’t hold the right to a good title. To protect your position, respond by email promptly to any communications from the lender, demonstrating your cooperation and honesty.
When responding, include the following details:
- Where and from whom did you purchase the car (name and address)?
- What was the date of purchase?
- How much did you pay for the vehicle?
Include copies of relevant documents in your email, such as the receipt/invoice and the V5C registration certificate in your name.
Keep a detailed record of all correspondence to ensure a clear paper trail.
You may also wish to contact the seller or dealership directly to address the situation, as they may need to assist in resolving the issue.
Learn about Proof of Ownership
How Can I Buy a Car With Outstanding Finance Privately?
Knowingly, buying a car with finance outstanding is illegal. The loan is secured against the vehicle. If you ignore the debt, you will lose the car and the money paid to buy it.
Steps to buying a car privately with an active hire purchase, personal contract purchase or lease purchase agreement:
- Run a car history check with CarVeto. Note the lender, type of finance, agreement number and contact information
- Tell the seller you know there is outstanding finance, and it must be settled before you can buy
- Contact the lender and obtain written confirmation that the finance has been paid off.
- Ask for a settlement letter by email.
Once the finance is paid off, you can legally purchase the vehicle.
The seller must pay the difference if more money is owed than the car’s value (negative equity).
Once the finances are complete, request a receipt or invoice and include DVLA Transfer of Ownership.
Should I Worry About Unit Stocking Finance When Buying from a Dealership?
No, there is generally no need to worry about unit stocking finance when purchasing a car from a dealership. Unit stocking finance is a lending arrangement that dealerships use to buy cars for their forecourt. Each vehicle is tied to a loan recorded with a lender, which is settled when the vehicle is sold.
To safeguard your purchase:
- Ask the dealer for written confirmation that the loan has been paid off before completing the sale.
- Our database automatically updates when unit finance is cleared, ensuring the vehicle has no financial ties post-purchase.
If you’ve already bought a car with outstanding finance from a dealership, you can use the CarVeto database to confirm the settlement. Should you have additional concerns, contact us for assistance.
Selling a financed car is illegal. Ensure the debt is fully paid off before transferring ownership or handing your car over.
Can I Sell My Car on Finance?
No, you cannot legally sell a car with outstanding finance because the vehicle technically belongs to the lender until the loan is fully paid. Attempting to sell it without clearing the debt could have legal and financial consequences.
Here’s how the process works:
Most car finance agreements leave buyers in negative equity during the first half of their contract. Negative equity occurs when your car’s value is less than the settlement figure—the total amount required to pay off the loan in full.
As depreciation slows down over time and loan payments reduce the balance, buyers may enter positive equity, where the car’s value exceeds the settlement figure.
If you want to sell your car:
Request a settlement figure from your lender. This figure is typically valid for 10 days, giving you a limited window to pay off the loan. If this timeframe lapses, you can request a new settlement amount.
Sell your car and use the proceeds to clear the outstanding finance. Experienced dealers can help simplify the process.
While the steps may seem complex, they are manageable, and dealerships are well-versed in settling finance agreements during the sale process.
Can I Part Exchange a Car With Finance? HP and PCP Finance
Yes, you can trade in a financed car, though it involves additional steps compared to part exchanging a vehicle you own outright.
Contact Your Finance Company:
Inform them of your plan and request a settlement figure—the amount needed to clear your loan, including any outstanding payments, interest, and potential fees.
For Hire Purchase (HP) agreements, you may return the car and terminate the deal after paying 50% of the total loan value.
Get a Dealer Valuation: Ask the dealership or company offering the part exchange to appraise and value your car.
The surplus can go toward your new vehicle if the value exceeds the settlement figure.
By following these steps, you can buy a new car while managing an active finance agreement.
Frequently Asked Questions
Who is the Legal Owner of a Car on Finance?
The lender is the legal owner of a car on finance, as the loan is secured against the vehicle. The registered keeper may use the car but does not have legal ownership until the finance agreement is fully repaid.
How do I Transfer Ownership of a Car With Outstanding Debt?
There is no legal process for transferring ownership of a car with unresolved outstanding finance. Selling a vehicle with unsettled debt is illegal, as the car technically belongs to the finance company until the loan is fully repaid.
Why Did a Dealer Sell Me a Car With Outstanding Finance?
A dealer may sell a car with outstanding finance due to a stocking loan, which dealerships use to finance vehicles for resale. The loan is typically settled upon sale. Request proof from the dealer that the finance is cleared, and if concerns remain, verify the vehicle’s status through a trusted service or contact our team for support. More information on Should I Worry About Unit Stocking Finance?
What is a DVLA Outstanding Finance Check?
The DVLA does not offer an outstanding vehicle finance check. Instead, services like CarVeto can verify whether a car has unresolved finances before purchasing it.
What is an HPI Car Finance Check?
An HPI Car Finance Check is an online service that searches finance and asset registers to identify secured loans tied to a car, motorcycle, or light commercial vehicle. This ensures the vehicle is free from outstanding debts before purchase. It’s essential to explore finance agreement checks on used car for sale privately on Auto Trader and on car dealer forecourts.
How to Get Out of a Car Finance Agreement?
You can exit a car finance agreement by paying off the outstanding balance, often incurring an early settlement fee. This fee compensates the lender for the interest they would have earned over the entire term of the agreement. Contact your finance provider for a settlement figure, which includes any additional charges, and arrange payment to close the deal.
What is a Car Finance Cooling Off Period
A car finance cooling-off period is a 14-day window, as outlined by the Consumer Credit Act 1974, allowing customers to cancel their credit agreement without penalties. This period begins the day the contract is signed or when the finance terms are received, whichever is later.
Who is My Car Finance With?
Discover your car finance company details with a CarVeto Car Data Check. This service reveals the lender’s name, agreement type, reference number, and contact details, ensuring you have all the information needed to manage your finance agreement.
How Much Finance is Left on My Car?
To determine how much finance remains on your car, contact your lender and provide your agreement reference number. They will supply an early settlement figure detailing the amount needed to clear the loan.
What is a Vehicle Finance Settlement Letter?
A vehicle finance settlement figure is the outstanding balance loan repayment, granting you complete car ownership once settled. This enables you to sell the vehicle legally.
Do I Need a Settlement Letter to Pay Off Car Finance?
No, a settlement letter is not required to pay off vehicle finance. It is sent to you as confirmation and proof that the loan has been fully cleared.
What is an Early Settlement Car Finance Calculator?
An early settlement car finance calculator helps you estimate the total cost of paying off a loan secured against a vehicle before the end of the finance term. It factors the remaining balance, interest, and early repayment fees.
Related information: Road Tax Calculator by Reg
What is a PCP Settlement Figure?
A PCP settlement figure is the total amount required to pay off a Personal Contract Purchase loan in full. This includes any remaining monthly payments, interest, and the optional balloon payment typically due at the end of the agreement term.
What is a PCP Balloon Payment?
A PCP balloon payment is the final amount due at the end of a PCP agreement to keep the car. It reflects the car’s value and grants ownership upon payment.
Can You Pay Off a Car Loan Early?
Yes, you can settle a vehicle loan before the end of the agreement term. Early repayment allows you to save on future interest charges, potentially reducing the total cost of the loan.
Can I Trade a Car With Outstanding Finance
Yes, you can trade in a vehicle with outstanding finance. The dealership will typically settle the remaining balance on your behalf. If your car’s value exceeds the settlement figure, any positive equity can be used as a deposit toward your next vehicle.
Can I Upgrade My Car on Finance?
Yes, you can upgrade your car while it is still under finance, whether through a Personal Contract Purchase (PCP), Hire Purchase (HP), or Lease Purchase agreement. The process typically involves settling your existing finance agreement by paying off the remaining balance directly or rolling it into the new deal for your upgraded vehicle.
Can I Downgrade My Car on Finance?
Yes, you can downgrade your car on finance. This typically involves trading your current vehicle and settling any remaining finance balance. However, if you are in negative equity—where your car’s value is less than the outstanding loan—you must cover the shortfall.
Can I Confirm Outstanding Motorcycle Finance?
To check for outstanding finance on a motorcycle, car, van or other light commercial vehicle, simply input the vehicle’s registration number into our database. You’ll receive an instant report detailing any secured loans tied to the motorbike, ensuring you can make an informed purchase decision.