The fact is that when it comes to trading in financed cars part way through the leasing period, there’s a lot that needs to be considered. One of the most important aspects of which, is taking the time to look at the different options available to you. Once you have a better understanding of how the process of changing your car when you have outstanding finance works, you will be able to decide if it’s the right option for you.
It’s important to be clear about one common misconception: trading your car in does not necessarily wipe out car finance. However, this is actually only correct if the remaining lease balance is less than the vehicle’s trade-in rate. If the car is worth a different amount, then you have to pay off any additional balance. However, there is also the option of having the outstanding finance added onto a new car loan, if you opt to go down this route. This reduces the stress of having two different vehicle loans to pay off and rolls both into one monthly repayment plan.
If the loan on your car is still fairly new, then trading in could be a mistake, it also may not be an option. The moment you drive a car out of a dealership, its value decreases, so you may need to wait a while for the value of your current car to even out, otherwise you could end up paying more back as a result.
You could also be made to pay a prepayment penalty if you choose to trade your car in too early.
It’s important that when it comes to trading your car in that you take the time to do a little research, to ensure that you are in the best position possible and are armed with relevant information.
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 could be worth taking it to a local garage for a check-up, to ensure that you are aware of any issues and know what condition it is in.
It is 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. As long as you are aware of this and are happy to accept those terms, you shouldn’t have an issue finding a dealership that will accept you.
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.