The short answer is No, you can’t scrap your car if you still owe finance on it – at least not without sorting things out first. Under UK law, you must settle any car finance before selling or scrapping the vehicle. If you’re on a lease agreement, the car isn’t yours to own though some leases allow you to buy it at the end. Be warned: scrapping a car you don’t own can result in fraud charges. Even if you intend to use the scrap money to pay off the finance, you could still face legal action.
- ✅ Learn your options if your car is broken or beyond repair.
- ✅ Stop paying for a useless car: Explore voluntary termination, part-exchange, or selling.
- ✅ Avoid penalties: Find out how to scrap your car legally or return and stress-free.
What Happens If I Try to Scrap a Car on Finance?
If you scrap a car that’s still under finance, you’re essentially selling an asset that doesn’t fully belong to you. Your lender might take legal action, and it could seriously damage your credit score. Not worth the hassle, right? The key is to communicate with your lender and explore solutions that work for your situation. Don’t let a broken or unusable car keep you tied to a financial burden – with the right steps, you can resolve the issue and move on stress-free.
So, What Can I Do?
Don’t worry – Here are your options:
1. Pay Off the Finance
The simplest solution is to pay off the remaining finance. Once the car is fully yours, you’re free to scrap it.
2. Part-Exchange the Car
Some dealerships or scrap car services might allow you to part-exchange your car, even if it’s on finance. They’ll pay off the remaining finance and deduct it from the value of your new car or the scrap price.
3. Voluntary Termination
If you’ve paid off at least half of the finance (including interest and fees), you might be able to use a process called voluntary termination. This lets you return the car to the lender without any extra charges. However, this doesn’t apply to all finance agreements.
4. Sell the Car Privately
If your car is worth more than the outstanding finance, you could sell it privately. Use the money from the sale to pay off the finance, and keep any leftover cash.
What If My Car on finance is too expensive to repair?
If your car is worth less than what you owe, You’ll need to pay off the difference to the lender before you can scrap the car.
The Bottom Line
You can’t scrap a car on finance without clearing the debt first. But with a bit of planning, you can still get rid of your old car and move on.
If you’re still unsure about scrapping your car while it’s on finance, reach out to us. As a trusted scrap car service, we’ll help you figure out the best next steps. Scrap your car legally with us. We offer top prices, free collection, and a hassle-free process. Get started today!
