Selling Privately
If you want to achieve the best price for your bike, you may want to sell it privately. In order to do so, you will need to pay off the settlement balance, including any fees.
You could do this using your own savings, or look into the possibility of a short-term personal loan to cover the remaining payments.
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Let’s say you owe £4,000 on your bike to your (fictional) finance company Mr Motorbike Finance Ltd.
The bike is worth £7,000. You could take out a new loan for £4,000 from a reputable lender like AA Loans and pay off the £4,000 of finance you owe to Mr Motorbike Finance Ltd. The bike is now yours to sell and once you sell it, you have £7,000 cash in hand.
You could either settle the new AA loan, meaning you’re left with £3,000 from the sale of your bike or you could go and buy another bike with the £7,000 you’ve got in the bank and continue to pay off your AA loan.
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Paying off the finance
Because you do not legally own the bike until all repayments have been made, you cannot complete a private sale while there is outstanding finance on the bike.
Remember that your finance company will have registered your bike on the HPI and Experian databases when you took out the finance plan. This means it is easy for a potential buyer to check the databases before making an offer on your bike, so fibbing about finance is definitely out of the question.
What you can do is settle the finance in conjunction with the prospective new owner. You can call the finance company and pay off the existing finance and then the new owner will transfer you the money for the bike and you’ll end up with your asking price, less the amount you had to pay the finance company. Or, if you have a trusting buyer, they can settle the finance on your behalf and then transfer you the remaining money for the bike.
Let’s say the bike is worth £5,000 and you ow £1,500 to the finance company. You or the new buyer can settle the £1,500 and if the new biker does this, they then transfer you the remaining £3,500 and ride away.
Sell Your Bike Back To The Dealer
Some dealers will be able to manage the settlement for you. If you are looking to upgrade or just fancy a new set of wheels and don’t mind suffering a few small penalties for it, your dealer should be your first port of call.
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With this option, the settlement value can be transferred to a new finance agreement on your new bike. Alternatively, you could pay the cash to your dealer to settle it as part of your new deal.
A Word To The Wise
Repaying your finance agreement early can have penalties attached to it depending on your contract with the lender. Be sure to find out about any additional costs before you commit to settling the balance.
Likewise, trading in or part exchanging a bike that has outstanding finance on it will usually be subject to fees from the dealer, and they will no doubt offer you a lower part exchange value than you would be able to achieve if you sold your bike privately.
That’s why, if you need to finance a bike, it’s simpler to take out a loan as unlike PCP or HP, that loan is not attached to the bike, meaning you can sell the bike at any time.
But, if you genuinely need to sell your bike with outstanding finance, the above options are available to you.
Source: https://tholansonnha.com
Category: Finance
