No, if you have purchased the car using car finance the car will still be secured against the money borrowed.
Therefore, until the remaining debt is paid back the car remains the secured against the loan for the finance company. They can repossess the car if you stop making payments for the finance. Although at various stages of the finance agreement they stop being able to reposes the car. At this point they would have to go through court proceedings to reclaim the asset.
If the owner of the vehicle sells the car with outstanding finance on and stops making the payments, the person who has bought the car runs the risk of it being repossessed. At this point the seller (original owner) will end up in court and forced to pay back the rest of the loan. This is because the finance agreement is for the original owner, not the person they sold the car on to. The person who purchased the car also runs the risk of losing the vehicle due to unpaid finance and being left heavily out of pocket.
You cannot sell a car with outstanding finance and this includes outstanding hire purchase or conditional sale agreements. It is always advisable when buying a car to check that there is definitely no outstanding finance in place from any of the previous owners.
It is actually a criminal offence to sell a vehicle with outstanding finance. This is another reason why the finance needs to be settled before the ownership of the car changes.
Sometimes there is a specific need to sell the vehicle. If this does occur then you will still need to clear the finance before the vehicle is sold. To do this you could look at getting a personal loan for the balance of the finance still left on the vehicle. Once the sale goes through you could then settle the personal loan with the money made from the sale of the car.
If you can, it is always advisable to clear the finance by saving money and settling the final balance of your finance agreement with the lender. This way of selling a car on finance without there being any current financial issues and you will be left with the difference of the amount owed on finance and the amount you receive for selling the car.
