Changing your car when you have outstanding finance
Trading in your vehicle part-way through the contract is more common than you’d think, and can be done at pretty much any time, even if you owe outstanding finance.
Believe it or not, many people opt to change their cars part-way through their lease, and it’s easier than you might think!
Let’s talk about your options:
1. Simple pay the settlement figure
Typically once you’ve paid the settlement figure you'll be the legal owner for the car (Your lender will explain if this is not the case) and can choose whether to keep, part-ex or sell it.
2. Sell your car
Check with your lender whether you can sell your financed car privately or through a car dealer. Then you can use the funds from selling to pay all or part of the settlement figure.
3. Part exchange or swap your car
If you’re on a PCP or HP agreement, you’ll just need a settlement figure from your lender, V5C logbook in your name and a vehicle valuation.
Our top tips and advice for drivers wanting to change their car that has outstanding finance:
Get clued up on your finance contract - If you want to start a new car finance agreement, it helps to understand the contract between yourself and the lender. Is there any terms and conditions you’ll need to bear in mind before trying to sell your financed car, for example:
- Are there any terms that you would be breaching if you chose to change your car earlier with outstanding finance?
- Is there a penalty stated that would need to be paid?
- Does your lease period have to be at least halfway through?
Contact your finance provider –
Get in touch with your finance provider and ask if it would be possible to have a meeting or a phone call to discuss your situation with them. You may be able to come up with an agreement that you are both happy with, such as them restructuring your finance loan and spreading it over a longer period of time while combining it with a new finance loan, for your new vehicle.
If this isn’t an option, then you may want to look into companies that offer finance to motorists who already have outstanding vehicle finance.
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