It has become the norm in the UK for car buyers to spread the costs of their purchases over several years. Car finance deals differ significantly from one provider to the next, but can be pretty lengthy in nature.
Whether looking to pay for your car over the course of two, five or even ten years, there are plenty of options available.
But what happens if during the course of this repayment term, you find yourself in a position where your car may need to be scrapped? Or perhaps, you would simply prefer to scrap it than to sell it on, due to it having fallen into a fairly sorry state of repair.
In such instances, is there an allowance for scrapping a car that still has outstanding finance payments on it?
Terms and Conditions Apply
There’s technically no fixed answer to this question, as all car finance contracts are unique. Terms and conditions vary significantly from one agreement to the next, depending on the type of finance taken out.
For example, if you were to take out a personal loan, you are technically borrowing cash from a service provider. If you use this money to pay for a car, you become the rightful owner of the vehicle at the time of the transaction. In which case, you are perfectly within your rights to sell or scrap the car at any time, should you wish to do so.
By contrast, the vast majority of other types of car finance expressly forbid selling or scrapping. This includes forms of vehicle finance such as hire purchase, lease or credit sale. In all such instances, you do not actually become the owner of the vehicle until you have paid for it in full.
This in turn means that the vehicle belongs to the service provider, for the duration of the loan agreement. You therefore cannot sell or scrap the vehicle under any circumstances, as it does not technically belong to you.
Checks regarding vehicle ownership and entitlement to scrap are conducted by all responsible car scrapping and recycling specialists, prior to collecting and processing vehicles. Hence, it’s highly unlikely you’d find yourself in a position where you could successfully scrap a car without outstanding finance payments, even if you attempted to.
Responsible Car Scrapping and Recycling
Should you find yourself in a position where scrapping your car with outstanding payments seems the sensible thing to do, you will need to contact the service provider directly. They will advise on the most appropriate course of action, which in some (rare) instances may result in permission being granted to scrap the vehicle.
More often than not, however, they will recover the vehicle themselves and do what needs to be done with it.
If you have any questions or concerns on any aspect of the car scrapping and recycling process, we’d be delighted to hear from you any time. Call the team at Take My Scrap Car to learn more, or email us with details of your query and we will get back to you as soon as possible.
