The first thing to understand is that trading your car in doesn’t necessarily wipe your car finance figure. This is only correct if the remaining loan balance is less than the vehicle’s trade-in value. If the car is worth a different amount, then you have to pay off any additional balance.
You could also choose to have the outstanding finance added onto a new car finance agreement. This reduces the stress of having two different vehicle payments to pay off and rolls both into one monthly repayment plan.
It’s important that when it comes to changing your car that you take the time to do a little research, to ensure that you are in the best position possible. Take the time to find out how much your vehicle is worth, to ensure that you don’t end up overpaying. Your car will be examined before being accepted back as a trade in, so it’s important that you are aware of the condition of your vehicle. It’s also important to be aware that if you still owe money on your vehicle, that you will be expected to make larger monthly repayments with a higher rate of interest for the new vehicle that you opt for.
One of the most important steps you can take is to read your contract. It is vital that you ensure that the terms and conditions of your contract allow you to change your car early, even if you have outstanding finance.
If you are in a position where you want to start a new car financing agreement, either because you can’t afford to keep paying for your current vehicle or because you want to upgrade, but still have outstanding finance to pay off, knowing where to start can seem extremely complex. Be clued up regarding what the contract between yourself and your financing company says. Are there any terms that you would be breaching if you chose to change your car earlier with outstanding finance? Is there a penalty stated that would need to be paid? Does your lease period have to be at least halfway through? These are all important factors to check within your contract.
Get in touch with your finance provider and ask if it would be possible to have a meeting or phone call to discuss the situation with them. You may be able to come up with an agreement that you are both happy with, such as them restructuring your finance loan and spreading it over a longer period of time while combining it with a new finance loan, for your new vehicle.
If this isn’t an option, then you could also opt to get in touch with a specialist car financing company that focuses on offering new finance to motorists who already have outstanding vehicle finance. There are a number of specialist companies around that can offer a variety of approaches to getting car finance when you already have an outstanding lease in place. You may be able to trade in your current vehicle and switch to a different one and then role the two loans required into one. You have plenty of options available, it’s just a case of finding a company that will be able to help you.
The idea of being able to change your car and upgrade to a newer model or upsize to a larger design, might seem almost impossible if you currently have outstanding finance. However, the fact is that is not the case - it is possible to change your car even if you have outstanding finance, it’s just a case of knowing how to approach the situation as well as what you should expect your options to include. Once you’re aware of the options that you have, the process of changing your car, even with outstanding finance, should be far easier and more straightforward than you imagined it would be.