Can I Scrap a Car on HP?

Having a major accident or fault with a car on finance can be a difficult situation.

Sometimes the cost of repairs can far outweigh the remaining balance on the finance agreement, or even the value of the car itself. In such a case, many people will consider scrapping their car and then will wonder if it’s possible to scrap a car that has outstanding finance.

Even though there are several different finance options for cars nowadays, the general rule is that you don’t actually own the car that you are paying for until all of the finance has been paid for. Therefore, it’s not your decision as to whether you should scrap the car or, until you have resolved any outstanding debt on the car.

There are some instances where it may be possible to sell your car even if it has outstanding finance, but you clearly won’t be able to legally take your car to the scrap yard and have it broken or destroyed. Vehicle dismantlers will perform various checks to determine whether the car is on finance and will simply refuse to take it if there is an outstanding balance. Not good!

What makes this situation difficult is the fact that you could well be in possession of a car that isn’t roadworthy or safe to drive, yet cannot be legally disposed of. Unfortunately, when it comes to scrapping a car that has outstanding finance, you only have a few options to do it legally.


Should I settle the Outstanding Finance?

This is the simplest solution to the problem.

Once all outstanding finance on the car has been settled, then all agreement terms with the actual owner have ended. This makes you the legal owner of the car which means you have the option of selling it to a vehicle dismantler. Most finance plans will give you ownership at the end, but it’s always a good idea to check because some finance plans insist on taking back the car at the end of the term.


Should I Repair the Car?

If your car is damaged or faulty and you don’t have the money to settle the existing finance, you should consider getting it repaired if financially viable.

This isn’t the most ideal solution as it means that you will be financially responsible for both the repairs to the car as well as the finance payments. However, if a car is a necessity and you can’t afford to settle the debt on it then this is probably your best option.


How to Find a Buyer willing to Settle the Outstanding Finance

This applies mainly to cars that are worth repairing, or are particularly valuable for their parts, and not to vehicles that are only worth scrap value.

You may be able to find a buyer who is willing to settle the outstanding finance on your car in exchange for signing you up to a new agreement with them.

Although this isn’t a particularly common solution, if your car is unroadworthy or not worth much but you can’t afford to pay the finance settlement figure, then it could be an option worth considering.

So, if your car is on finance and you want to scrap it, you will find that few vehicle dismantlers will take if off of your hands. This is because it is illegal to knowingly sell a vehicle that has an outstanding finance agreement.

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3 thoughts on “Can I Scrap a Car on HP?

  1. I have a car with a gearbox issue that I can’t afford to fix and have tried so many times to get finance company to take it back. Since then they have written the debt off but it’s still showing as outstanding finance as I have someone willing to buy it but not with said if buyer pays them direct they will remove the charge on the car. how can I be do sure they will keep to their word

  2. I bought a car that had “UNIT TESTING” on the finance thing, what does this mean? The check was via another company not yours but I cannot get hold of them to ask. I am sorry but please help?

  3. I know of several situations where scrap car guys have took ownership of a vehicle but before paying for it via bank transfer have opted to do a HPi check. They then have held on to the car on behalf of the creditor, for either a reward or for goodwill. Never sell a car with finance, always clear it first,

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