Can I Swap and Change My Car While on Finance?

However, caveats do apply. For example, you don’t own the car until you’ve paid off what you owe. Therefore, you may wonder, “can I change my car while on finance?”. It’s a savvy question and one you should know the answer to before you commit to a multi-year contract.

Can you swap a car on finance?

The short answer is no, not without settling up with the lender. As the finance payments haven’t been settled, you don’t actually own the car outright just yet. As a result, you need to clear them before you can begin to think about swapping vehicles.

To do that, you’ll need to contact the lender to obtain a car finance settlement figure. This figure is essentially the amount you must pay to end the contract. Once that’s finalised, you can look at the options open to you, three of which are outlined underneath.

What can you do?

There are three methods available to drivers who have a car on finance and want to swap to another deal. They are – pay up, sell your vehicle, or part-exchange with a dealer.

Paying up

Settling up is probably the simplest method if you have the necessary funds. By contacting your lender and clearing the balance, there’s no reason to mess around listing your vehicle and dealing with the admin. The same goes for part-exchanging, too. Of course, the figure could be high depending on how far through your deal you are and how much you have already paid.

Selling your car

Selling the car means you can use the cash to pay off your existing deal. You should receive the current market value of the car, making it easier to make as much profit out of the sale as possible. One issue to keep in mind is the buyer. Some lenders won’t let you sell privately, but they do allow sales to dealerships. In any case, you need to pay off the existing finance agreement first to get your name on the V5.

Part-exchanging

Although it sounds like you’re doing a swap, the reality is that you still need the V5. As a result, it’s impossible to part-ex your existing vehicle without the finance settlement figure. Essentially, part-exchanging means you use any positive equity you have to finance your next deal.

What do I need to do?

There is a selection of essentials. Firstly, you can’t do anything without a valid V5 that’s in your name. Secondly, it’s best to get the car valued so that you understand the figure you’re looking for. Thirdly, working out the equity – positive or negative – will highlight how much you can put down as a deposit on a new PCP or HP agreement.

How we can help

As you can see, taking out car finance doesn’t mean you’re tied to one car if something better comes along. It’s just important that you go about swapping your car on finance in the right way! If you’ve got another car in mind and would like to work out your monthly payments, use our free car loan affordability calculator to do the maths! Alternatively, get in contact to discuss your options on 01246 458 810.