Can you Part Exchange a car on Finance?
Car Part Exchange is a great way to upgrade your car with minimal fuss. It allows you to trade in an old vehicle when purchasing a new one, with the value of your old car taken off the price of the new one.
But can you part exchange a car on finance? In this article from Pendle Lease, we'll explore what car part exchange is and how it works, so you can make an informed decision about whether it's right for you.
What is car Part Exchange?
Part exchange of a car is one of the most common ways to upgrade your vehicle. It involves trading in your old car in return for money or another vehicle when you purchase a new one. The value of the part-exchange is normally dependent on the condition and age of the car being traded in, as well as market trends.
Can you Part Exchange a car With Outstanding Finance?
It is possible to part exchange a car with outstanding finance, however it is recommended to settle your loan before you look to upgrade. The remainder of your loan will be paid off through the value acquired from your vehicle's trade-in, and any value left over can be put towards your new vehicle.
How do I Part Exchange my Financed car?
Part exchanging your financed car can be relatively straightforward, as long as you know what you’re doing. Follow these steps for a straightforward exchange.
Get up to date with your finance agreement
You will need to check with the lender of your existing finance agreement if they allow part exchanges, as some lenders do not permit them. You will also need to make sure that the value of your current vehicle is sufficient enough against the value of the new vehicle, otherwise you may incur additional costs. The final thing to consider is to make sure that all of the paperwork associated with both vehicles is up-to-date and in order before proceeding with a part exchange.
Value your vehicle
When attempting to determine how much your current car is worth, consider factors such as its age, condition, mileage and any additional features that could increase its value. An experienced auto-dealer will be able to assess the overall condition of the car in order to give an accurate valuation. Online tools can also provide an estimated price based on similar cars currently being sold in your area.
Your dealer can settle your finance
By providing details of your existing loan agreement, the dealer will help negotiate with the lender on your behalf, and they can review the current agreement and work with the lender in order to come up with a solution that works for both parties. As part of this process, they may also be able to arrange for any outstanding balance or fees associated with the previous loan agreement to be settled prior to completion of the new deal, helping you get into your new vehicle sooner and more conveniently than expected.
Part exchange with different finance options
As there are a range of different financing options available, it’s important to note whether you can part exchange your car on these different types of finance.
Can you part exchange on a PCP contract?
A PCP contract allows you to make fixed monthly payments before owning the car outright at the end of the term. Part exchanging your old car can help reduce the cost of your new vehicle or even completely cover it in some cases. The process involves trading in your old vehicle and receiving an agreed price for its value which is then used towards the cost of any additional finance required for the new car, such as any deposit and interest charges.
Can you part exchange on a HP contract?
Part exchanging on a HP contract works similarly to a PCP part exchange. The process is relatively straightforward, and yet again refers to offering up your current car as a deposit towards the cost of buying a brand-new vehicle, which can make financing your next model much easier. After selecting your next vehicle, you are then asked to provide details about your existing model so that its value can be assessed. This amount will then be deducted from the total cost of the new car, making the remaining balance much more manageable.
What is Negative Equity on Your car Finance?
Negative equity on your car finance can have a detrimental effect on your financial situation. It occurs when the amount you still owe to the lender is more than the market value of your vehicle. This can happen if you part exchange a car which is worth less than the amount left to pay on its finance agreement, effectively leaving you with a larger debt.
What Documents do you Need to Part Exchange Your car on Finance?
There are a number of documents that you will need to provide when part exchanging your car on finance:
- MOT certificate
- Your vehicles logbook
- A copy of Your financial agreement
- Service history documents (if you have them)
Conclusion: Can you Part Exchange a car on Finance?
In conclusion, it is possible to part exchange a car on finance but it is important to make sure that the customer fully understands the process and any extra costs associated with it. They should also be aware of any restrictions or charges if they decide to break their contract early. Additionally, speaking with an experienced salesperson will help them gain a further understanding of what they are agreeing to.
Car Finance Deals at Pendle Lease
At Pendle Lease, we offer a range of car and van finance deals on different models, makes, and engine size. If you are interested in finding out more about our car finance lease deals, contact us directly or call us on 01277 549500 to speak to one of our specialist advisors.