Can I Change My Car on Finance?

Car finance can often be overcomplicated, but it doesn't have to be.

If you have a car on finance and are wondering what options are available, look no further. Car Credible is here to help you understand everything you can do with your deal.

Buying a car is one of the most expensive purchases you'll ever make, so you must weigh the pros and cons before you make your final decision.

Financing is the most popular option when buying a new car, with 90% of new cars now being purchased on finance. While this is the best option when buying a car (in our opinion), it can be difficult to understand what everything entails and your rights within the contract term.

Do you have a car on finance and want to know your options? Sign up to Car Credible today to discover if you could switch to a new car or get into a better finance deal.

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One of the main questions we get asked is whether you can change your vehicle while on finance. The answer is yes, although several stipulations need to be adhered to first.

In this article, we'll look at the options available to you and everything you need to consider if you are thinking about the next steps with your vehicle. Remember to sign up to Car Credible for all the best guidance in helping you understand where you're at in your deal.

Can you swap your car finance for another car?

If you have a car on finance, it is possible to switch to a newer vehicle. However, before you can do that, there are several steps that you will need to undertake to start the process of getting out of your agreement and into a new one.

First, you will need your early settlement figure to understand how much it would cost to get out of the deal. To get this, you can contact your lender, or if you're a Car Credible user, we will automatically display this on your dashboard.

Once you know your settlement figure, you'll need to know how much your vehicle has depreciated and its current on-the-road value. Again, you will discover this figure by signing up for Car Credible. Simply entering your reg, mileage, and a few extra details will give us your vehicle's value in minutes.

After that, you will need to know your vehicle's equity position, which is the value minus the settlement figure. If your motor is worth more than £0 after you have taken away the settlement figure, you are in positive equity, which gives you more flexibility.

If you are in a negative position, don't worry, you could still get out of your current motor and into something new. However, you would have to make up the financial difference which could be costly, depending on your equity position.

In a positive position, you can use the equity you have to put towards the deposit of the new vehicle, making it that little bit cheaper for you upfront and your monthly repayments.


Upgrading your car whilst on finance

Everyone's circumstances are different, and people may want to get out of their current car finance agreement because they're struggling to make their repayments for various factors.

The cost of living crisis, which includes rising inflation rates, energy price hikes, and more, is one of the most common factors in people wishing to get out of their car finance deal early.

On the other hand, some may have been given a pay rise at work, inherited, or won some money and want to upgrade their vehicle to something more expensive.

It's an option that many customers on a Personal Contract Purchase (PCP) finance deal regularly undertake every couple of years and is one of the biggest pros of this type of finance plan.

While on a PCP, you don't own the vehicle at the end of the term unless you pay the optional balloon payment. That may be a good option for some, but for many others, it's the perfect opportunity to hand the motor back to the lender and get into something new.

PCP finance plans are perfect for those that wish to upgrade their vehicle every few years and get into the latest make and model. Depending on each case, you may even be able to get into a new car while keeping your monthly payments the same, possibly even lowering them.

It's, therefore, a great finance option to have and something to consider if you are unsure whether PCP, Hire Purchase (HP) or even a personal loan is the right decision for you.

Asking for a settlement figure

Getting your car finance settlement figure is easy and can be done with us today. Click on the banner below to sign up for Car Credible and enter a few details, and we will have your settlement figure for you in minutes.

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It's quick and easy and saves you from picking up the phone to contact your lender. The beauty of Car Credible is we are your car finance assistant at the touch of your fingertips; everything gets done from the comfort of your home.

Consider doing a part-exchange

Part-exchanging is the process of trading your current vehicle in for a new one. It's a relatively simple process, but you should be prepared to research everything you want out of your new motor to ensure you're getting the best value.

If you decide to part-exchange, you'll save time and effort by not having to sell the vehicle yourself. You essentially sell and buy all in one go, so there'll barely be a moment that goes by without you owning a car.

But, you will need to access your early-settlement figure, depreciation value, and equity position before you can part-exchange; you'll need to know if you have any profit within your motor to put towards something new or are required to stump up some of your own cash.

Once you've identified the new vehicle you wish to buy, you can part-exchange and get into your new motor. Having a car on finance gives you great flexibility to switch your vehicle throughout your deal.

Can you transfer your car loan to another bank?

Transferring your car loan from one lender to another is a simple process and part and parcel of the car finance journey.

If you are in a position where you wish to switch to a newer car or even refinance your current deal, you will settle your existing finance with your current lender in a one-off payment. That will then be covered by the new lender or incorporated into your finance plan.

Once you take out a car on finance, you are not tied to that one lender until you have completed your finance deal. If you want to part-exchange, you can compare lenders to discover the best deals.

When you have decided on your new lender, they will cover the amount you owe your current lender, and you will be free to continue financing with the new lender. You will barely have to lift a finger as the work will mostly all get done for you; that is the beauty of car finance.


Can you change your car halfway through finance?

Yes, it is possible, but there are certain criteria that need to be met. You'll need to settle your finance agreement first before taking out a new loan.

How soon can you change your car on finance?

It depends on how quickly your car depreciates in value and its equity position. If your car is worth more than the finance you owe at any point of your deal, you could change your car.