In order to understand this better, let’s first look into what a car on finance means:
Leasing or contractual financing means that the ownership of the vehicle is with the lender. In the case of a lease, your car will go back to the lender after a predetermined number of years. Financing means you pay a certain amount to the lender bi-weekly or monthly. The general rule of thumb is that you don’t actually own the car you’re paying for – at least, not until you’ve paid everything off.
You should have ownership of the vehicle you want to scrap. If your car is too damaged or needs too many repairs – you should pay off the remaining amount towards the car. Once you have ownership of the vehicle you can scrap it.