Can you part exchange a car on finance?

Wondering if you can part exchange a car on finance? This handy guide tells you everything you need to know.

Curious if you can part exchange a car on finance? The good news is that you can! As long as you know your car’s value and how much is left to pay, part exchanging a car on finance is doable. Check out our guide to see how it all works and what to watch out for.

Remember, you can also sell your car right here on Carwow. We’re here to help you through every step of your car-changing journey.

What is part exchange?

Part exchange means trading in your old car as part payment for a new one. Instead of selling your car privately, you hand it over to the dealer, who values it and knocks that amount off the price of your new car, making it cheaper to buy or finance.

Can you part exchange a car on finance?

Yes, you can usually part exchange a car that’s still on finance. It’s a bit trickier than if you owned it outright, though, since you’ll need to sort the settlement figure for your existing finance with your provider and dealership. This affects how you get your new car on finance – or if you might even get some money back.

How to part exchange a car on finance

Part exchanging a car on finance is fairly straightforward, and the dealer you’re trading with can usually handle most of the legwork. Here’s how it works:

1. Check your current finance agreement

Contact your finance provider and request a settlement figure. This is the amount you’ll need to pay to fully settle the agreement and take ownership of the car.

The figure will typically be the original total finance amount, minus any deposit and the monthly payments you’ve already made.

2. Ask the dealer for a valuation

With your settlement figure in hand, ask the dealer for a valuation of your current car.

If their offer doesn’t meet your expectations, you don’t have to accept it – you can always explore other selling options to see if you can get a better deal. In fact, most Carwow sellers surveyed in March 2024 got an average £1,000 more vs part exchange quotes.

3. Leave the rest to the dealer

If you’re happy with the dealer’s offer, accept the part exchange deal and let them take care of the rest.

They’ll settle the remaining finance on your behalf. You’ll just need to give them details of your lender and the settlement figure. Be sure to hand over all relevant documents too, including the V5C logbook, service book, and any manuals.

Tips for part-exchanging a car on finance

Keep all these tips in mind when part-exchanging a car on finance:

• Check how much you still owe on your car before you start.
• Get a free valuation to see how much your car is worth.
• See if selling privately might get you more cash.
• Make sure the dealer pays off your finance before you hand over the keys.
• Know your budget and what new finance deal works for you before signing anything.

Should I part exchange a car on finance?

Whether or not you should part exchange a car on finance really comes down to how eager 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 yourself.
• You’ve been offered more in part exchange than you’d get selling it privately.

Reasons not to part exchange a car on finance

• You’re happy to wait until your current agreement ends.
• You could make more by selling the car privately.
• The car’s worth less than your settlement figure (this is called negative equity).
• You’re unsure if you can take on a new finance deal right now.

What alternative options are there to part-exchanging?

If you don’t want to part exchange your current financed car but still want something new, there are other options.

You can ask for a settlement figure from your lender, pay off the remaining balance, and then sell the car privately. Just remember that it’s illegal to sell a car with outstanding finance, so always settle the agreement first.

Alternatively, if your finance agreement allows, you may be able to hand the car back with no further payments. However, this could mean losing money, so it’s best to consider this only if you’re sure it’s the right move.

Car change? Carwow!

Looking for a new set of wheels? With Carwow you can sell your car quickly and for a fair price – as well as find great offers on your next one. Whether you’re looking to buy a car brand new, are after something used or you want to explore car leasing options, Carwow is your one stop shop for new car deals.

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