{"id":7412,"date":"2023-06-28T09:25:30","date_gmt":"2023-06-28T08:25:30","guid":{"rendered":"https:\/\/www.scrapcarnetwork.org\/news\/?p=7412"},"modified":"2025-02-26T07:15:39","modified_gmt":"2025-02-26T07:15:39","slug":"can-you-scrap-a-car-that-has-outstanding-finance","status":"publish","type":"post","link":"https:\/\/www.scrapcarnetwork.org\/news\/can-you-scrap-a-car-that-has-outstanding-finance\/","title":{"rendered":"Can you scrap a car that has outstanding finance?"},"content":{"rendered":"<p class=\"p1\"><span class=\"s1\">Car finance is a pretty useful financial tool for lots of people, offering an affordable way to buy cars that might have otherwise not been within reach. However, if you\u2019ve bought your car on finance, it does leave a few grey areas when it comes to situations like <\/span><a href=\"https:\/\/www.scrapcarnetwork.org\/\"><span class=\"s2\"><b>scrapping your car<\/b><\/span><\/a><span class=\"s1\">. If you find yourself in a situation in which your car is written off but you still have an outstanding finance balance, can you scrap your car? <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Essentially: no. Not without permission anyway. Below, we go into exactly why, and what else you need to know about scrapping a car on finance. <\/span><\/p>\n<h2 class=\"p3\"><span class=\"s1\">What is car finance? <\/span><\/h2>\n<p class=\"p1\"><span class=\"s1\">Car finance is an all-encompassing term that refers to a variety of ways to buy a car without paying the full price in one go. Instead the cost is spread out over a period of time and you pay instalments, usually monthly. There\u2019s no denying how useful that is, but it\u2019s important to remember that because you\u2019re effectively taking out a loan, you will most likely end up paying more for the car than if you were to buy it upfront &#8211; it\u2019s a swings and roundabouts sort of situation. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">There are a range of different finance options out there when it comes to buying a car, all complete with their own nuances. These include:<\/span><\/p>\n<ul class=\"ul1\">\n<li class=\"li1\"><span class=\"s1\">A personal loan from the bank or a building society<\/span><\/li>\n<li class=\"li1\"><span class=\"s1\">A Personal Contract Purchase (or PCP) deal<\/span><\/li>\n<li class=\"li1\"><span class=\"s1\">A Hire Purchase (or HP) deal<\/span><\/li>\n<\/ul>\n<p class=\"p1\"><span class=\"s1\">A personal loan will see you owning the car as soon as you buy it outright, and you\u2019ll have the option of many different lenders to choose from. If you opt for a PCP deal, you\u2019ll place down an initial deposit and then make monthly repayments to cover the depreciation, and at the end of the deal you have the option to pay the car off and keep it, or exchange it for another model. A HP deal is similar to a PCP deal, in which you hire the vehicle and pay monthly instalments, but when your last payment clears in a HP deal, the car is yours.<\/span><\/p>\n<h2 class=\"p3\"><span class=\"s1\">Why can\u2019t you scrap a financed car<\/span><\/h2>\n<p class=\"p1\"><span class=\"s1\">So, now we\u2019ve explored the options available, why can\u2019t you scrap a car that has outstanding finance? Well, it\u2019s basically because the car wouldn\u2019t be yours to scrap. Legally speaking, if you\u2019re still repaying the car finance, then by definition you are not the owner of the car. As you can imagine, scrapping a car that\u2019s not yours can get you in all kinds of trouble, so it would be best to hold off on that until you\u2019ve spoken to your provider. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">A bank or building society loan is slightly different, because you bought the car outright, but even if you do choose to <\/span><a href=\"https:\/\/www.scrapcarnetwork.org\/\"><span class=\"s2\"><b>scrap your car<\/b><\/span><\/a><span class=\"s1\">, you\u2019ll still have to repay the loan. If you didn\u2019t take out a bank loan and instead opted for a PCP or HP deal, the first port of call would be to contact your finance provider and let them know, then the DVLA and your insurance provider. From there, you\u2019d be advised on what to do next.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">You\u2019d more than likely be presented with the following options:<\/span><\/p>\n<ul class=\"ul1\">\n<li class=\"li1\"><span class=\"s1\"><b>Clear your outstanding balance<\/b> &#8211; You could use the money from your insurance pay out to pay the amount remaining on your finance agreement (if it covered it, that is).<\/span><\/li>\n<\/ul>\n<ul class=\"ul1\">\n<li class=\"li1\"><span class=\"s1\"><b>Buy back the car and repair it <\/b>&#8211; If the damage is anything less than Category A or Category B, you could look into buying it back, fixing it up and keeping it (so you can use it as you pay off the remaining balance on your loan)<\/span><\/li>\n<\/ul>\n<ul class=\"ul1\">\n<li class=\"li1\"><span class=\"s1\"><b>Insurance money <\/b>&#8211; You could use your insurance pay out to buy a entirely new car and keep paying the finance on your old car until you\u2019ve paid it off, at which point you can simply forget about it.<\/span><\/li>\n<\/ul>\n<p class=\"p1\"><span class=\"s1\">And if your circumstances mean that you do ultimately decide to<\/span><span class=\"s2\"><b> scrap your car<\/b><\/span><span class=\"s1\">, that\u2019s exactly where we can help here at Scrap Car Network.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Our super fast collection service is nice and easy to arrange. All you\u2019d have to do is enter your car reg and postcode into the fields on our site and you\u2019d get your instant quote. Then we\u2019d be in touch to arrange a time and place to take it off your hands. We finalise the payment upon collection, and that\u2019s all there is to it! So then\u2026 wondering how much your car could be worth?<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Car finance is a pretty useful financial tool for lots of people, offering an affordable way to buy cars that might have otherwise not been within reach. However, if you\u2019ve bought your car on finance, it does leave a few grey areas when it comes to situations like scrapping your car. If you find yourself [&hellip;]<\/p>\n","protected":false},"author":113,"featured_media":7419,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<meta name=\"description\" content=\"At Scrap Car Network, we like to do as much of the hard as we can for you when you scrap your car - but here&#039;s what you need to know about handling car finance.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.scrapcarnetwork.org\/news\/can-you-scrap-a-car-that-has-outstanding-finance\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Can You Scrap a Car with Outstanding Finance?\" \/>\n<meta property=\"og:description\" content=\"At Scrap Car Network, we like to do as much of the hard as we can for you when you scrap your car - 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