If you’re currently financing your car but feel like it’s time for something new, you might be wondering if you can trade in your existing car.
Well, the good news is you can part-exchange a car on finance, you just need to know your car’s current value and how much you’ll need to pay to settle the finance.
Read on for a full guide.
How to part exchange a car on finance
Part-exchanging a car on finance is reasonably simple to do, with the dealership you’re trading to able to do a lot of the legwork:
- Check your current finance agreement and ask for a settlement figure
- Ask the dealer for a valuation on the car
- Leave the rest to the dealer
Check your current finance agreement
You can ask the lender of your current finance agreement to offer you a settlement figure. This is the amount you’ll need to pay to take full ownership of the car and settle the existing agreement.
This will be the full amount of finance agreed at the start, minus any deposit placed and the amount covered by monthly payments you’ve made so far.
Ask the dealer for a valuation of the car
Once you have a settlement figure in hand, you can see how much the dealer you want to part exchange with will offer you for the car.
If you’re not happy with the amount offered, you’re under no obligation to accept, so you should take time to see how much you can get for the car through another means of selling.
Why not sell your car with carwow? It’s a simple process and the price you’re offered is the price you’ll get — no haggling here.
Leave the rest to the dealer
If you’re happy with the valuation from the dealer, you can simply accept their part exchange offer and leave them to sort the rest.
They’ll be able to clear the remaining finance on your car, you’ll just need to provide them with the details of your lender including the settlement figure. You should hand over ay documentation for the car too, including the V5C, service book and any manuals.
Should I part exchange a car on finance?
Whether or not you should part exchange a car on finance is dependent on how keen you are to get into something new.
Reasons to part exchange a car on finance
- You’re keen to get into a new car quickly
- You don’t want the hassle of settling the balance separately
- You’ve been offered more for part exchanging than you could by selling elsewhere
Reasons not to part exchange a car on finance
- If you’re happy to wait until the end of your existing agreement
- If you can make more money on the car by selling elsewhere (this is typically the case, though requires more legwork)
- If you’ll get less for the car than the settlement figure (this is known as negative equity)
- You’re unsure if your financial situation will allow for a new credit agreement
What alternative options are there to part-exchanging?
If you don’t want to part exchange your current financed car, but want to move into something new, you do have alternative options.
You can request a settlement figure, pay the amount off and then sell your car privately. You should never sell the car privately without settling a finance agreement though — this is illegal.
Alternatively, if your agreement allows, you can hand the car back without making any further payments. You’ll likely lose out on money doing this though, so only take this option if you’re certain.
Part exchange your car with carwow
You can part-exchange your financed car through carwow. All you need to do is enter a few details, upload a few photos and carwow will advertise to a network of dealers. Just tap the green button below to find out more.