Is it possible to transfer car finance?
Under normal circumstances, it’s not possible to transfer your car finance to someone else.
A car finance agreement is a legally binding contract between you and the finance provider. It’s based on your personal credit profile and financial circumstances at the time you sign the contract, so it can’t be transferred to someone else.
However, if you signed your car finance agreement with a guarantor, your debt can be passed to them if you can’t keep up with the finance payments.
If I can’t transfer my car finance, what options do I have?
If your financial circumstances have changed and you’re having trouble making your repayments, or you simply want to upgrade to a newer model, there are other options you could explore.
Voluntary termination
You have a legal right to end your personal contract purchase (PCP) or hire purchase (HP) agreement and return your car once you've paid at least 50% of the total amount owed, including any interest and fees. This is known as 'voluntary termination'.
If you haven’t yet paid half of the total amount, you’ll need to either keep paying until you have or pay it in one lump sum as part of the termination.
Early settlement
If you want to end your PCP or HP finance agreement early and keep the car, you’ll need to ask the finance provider for a settlement figure. This is the total amount needed to pay off the agreement early and includes the final balloon payment if you took out a PCP agreement.
Once you’ve paid the settlement fee, you’ll be the legal owner of the car and can then choose to keep or sell it.
Refinance the car
To refinance your car, you could take out a new PCP or HP agreement in order to pay off the outstanding balance on your existing car finance agreement. Or you could refinance by taking out a personal loan.
If you refinance to a new deal, it could mean a lower interest rate and reduced monthly repayments. Or, if you have an existing PCP agreement, you could refinance to spread the cost of the final balloon payment rather than pay it all in one lump sum.
When is it possible to transfer car finance?
While you can‘t directly transfer a car finance agreement, your debt can effectively be passed to somebody else if you signed your agreement with a guarantor(usually a family member or close friend).
If you've signed with a guarantor and don’t keep up with your car finance payments, the car finance debt will be transferred to the guarantor and it then becomes their responsibility.
FAQs
Is transferring car finance the same as transferring ownership of a car?
No, transferring car finance is not the same as transferring ownership of a car.
You can transfer ownership of a car to another person by informing the DVLA. You can do this online or by post, and you’ll need the car’s V5C registration certificate or logbook.
With car finance, the agreement remains in your name unless you voluntarily terminate it, settle the deal early or refinance to pay it off.
Can you transfer car finance to another car?
No, you can’t transfer car finance to a different vehicle because the agreement is directly linked to the car you originally chose.
Lenders base the finance agreement on specific factors such as the car’s value and condition, and how much it’s likely to lose in value.
Transferring the agreement to another car would trigger a reassessment of this. As a complex financial calculation within the car finance industry, it’s currently neither possible nor practical.
Can you transfer a personal loan to another person?
No, you can’t typically transfer a personal loan to someone else.
This is because personal loans are tailored to the individual. Lenders look at your financial history, your credit profile, your income and employment status when deciding on the interest rate and loan amount to offer.
As well as writing for Churchill and Privilege insurance websites, Karen’s CV includes working with M&S, Debenhams, Tesco, Sainsbury’s and John Lewis. With over 20 years of editorial experience for big household names she leads a talented content team with a focus on simplifying personal finance for everybody.
Ele Clark is an award-winning editor who has held leadership roles at Which? and news-stand publications in London and Dubai. She’s appeared across the press and media, including BBC’s Panorama. With almost 20 years’ experience in personal finance, insurance and consumer journalism, she leads a talented team at Compare the Market, creating insightful, accessible content to help people make informed financial decisions.
Charlie is a senior commercial leader with close to a decade of experience across the UK’s leading personal-finance and comparison platforms. Before joining Compare the Market as Head of Commercial in 2024, he held senior commercial roles at TotallyMoney and MoneySuperMarket Group.
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