Hire purchase
The important difference from a loan: under HP the lender owns the car until the agreement is satisfied, so the finance has to be cleared as part of the sale rather than afterwards.
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This catches people out. Under hire purchase the vehicle belongs to the finance company until the final payment, so selling it privately without settling first is not simply unwise — it is selling something you do not yet own.
The clean route is for the buyer to pay the lender directly, with any balance coming to you. That way the agreement is provably closed and the title passes properly.
Ask your lender for a settlement figure in writing. It is the sum needed to clear the agreement today and usually includes a rebate of some future interest, so it will be lower than adding up your remaining payments.
Figures are typically valid for a limited window. If yours has expired, get a fresh one before agreeing anything.
HP has no balloon — you are paying the whole value across the term, so equity tends to build steadily and arrives sooner than on an equivalent PCP.
That means HP sellers are more often in positive equity, and more often pleasantly surprised by what selling leaves them with.
Questions
The finance company, until the agreement is satisfied in full.
Not until the finance is settled. Most private buyers will refuse, and rightly so.
Yes. The buyer pays your lender directly and sends you any balance.
Some agreements include an early settlement fee. The settlement figure your lender quotes will already reflect it.
Tell us about it once. We check the market and come back with the strongest price we can confirm.
Takes a couple of minutes.
Free · No obligation · No pressure to accept anything