To sell a vehicle on finance, a ‘settlement figure’ from your finance company is required. This tells you the final amount due to your lender in order to settle the finance contract and transfer ownership. The settlement quoted in the letter is subject to change based on your monthly payments and is, therefore, only valid for a short time (usually 10 days).
When you’re ready to think about selling your financed car, simply write to your finance company to request a settlement letter. When this comes through, you should check that your vehicle’s value is higher than the total amount due to the company – this is called being in positive equity. When you sell your car for a price at this value or higher, your buyer will clear the remaining finance and pay you the surplus. If you’re in negative equity, however, and sell for a price lower than the remaining balance, you will lose some money on the sale.
When you request a settlement letter, your vehicle finance provider is then legally required to post or email it to you within 12 days. However, in practice, the figure is usually provided within one to three working days. For the letter to be valid, it needs to show your up-to-date total amount payable, along with the finance company’s bank details and the agreement reference number.
Please note the following requirements when you upload your finance settlement letter on Motorway, to prevent delays:
- Since your settlement letter is usually only valid for 10 days, it’s worth beginning the process of selling your car as soon as you get it and see that you are in positive equity and wish to sell. Otherwise, you will need to ask your lender to send a refreshed letter once it expires, if you still have not concluded the sale of your car.
- We can’t accept screenshots or forwarded emails of your financial settlement letter, so please upload or email the document in original format (normally PDF).
- Please ensure all uploaded documents have the whole document in view, the image is clear, and all text is readable.
Once you’ve uploaded your valid finance settlement letter and your vehicle is in the online daily sale, you proceed as normal, and your dealer will pay your surplus as soon as they collect your vehicle.
Their payment of your balance to your finance lender might take up to 10 business days to clear on the lender’s end, and we can request remittance advice from your dealer if desired, to prove they’ve made payment to the lender.
If a vehicle is paid for and collected shortly before a finance payment is due to come out, the finance company will flag this as an overpayment and automatically refund you.
If you sell a car on Motorway and are in negative equity, you will need to pay the difference to the dealer so they can clear the total balance with your lender in one transaction.