Selling an electric car with finance on it.

The process, briefly

Your right to an early settlement figure is set out in the Consumer Credit Act — the GOV.UK guidance on hire purchase covers the basics, and the Financial Ombudsman explains what to do if a lender is unhelpful.

Ask your lender for a settlement figure — the amount to clear the agreement today. Put it against the offer for the car. If the offer is higher you are in equity and the buyer settles the finance and pays you the difference. If it is lower, you cover the shortfall.

Under hire purchase and PCP the lender owns the vehicle until the agreement is satisfied, so the settlement has to be cleared as part of any sale. Full detail here.

Why EV negative equity has been more common

Used electric values fell faster than the guaranteed future values set at the start of many agreements anticipated. Where that happened, owners reached the middle of a term owing more than the car was worth — through no error of their own.

It is uncomfortable and it is not unusual. The important thing is to establish the position with real numbers rather than assuming, because the gap is often smaller than people fear.

Where comparing matters most

When you are in negative equity, every pound of difference between buyers comes straight off the shortfall you have to fund. A stronger offer is not an abstract gain — it is less money out of your pocket.

Because the spread between EV buyers is consistently wider than on petrol cars, this is precisely the situation in which accepting the first number is most expensive.