Part-Exchanging a vehicle on finance: a comprehensive guide
Making a decision to part exchange a vehicle on finance is a significant step towards upgrading your current ride. Here’s a detailed guide to help you navigate the process effectively.
Understanding the Possibility: Can you part exchange a vehicle on finance?
Yes, absolutely! You can indeed part exchange a vehicle thats under a finance agreement. However, to proceed smoothly, you need to have a clear understanding of your vehicle’s current value and the remaining finance amount, often referred to as the settlement figure.
Initiating the part exchange process: How to get started
The dealership you intend to trade with will assist you in the process, making it relatively simple for you.
- Request a Settlement Figure: Reach out to your finance provider to obtain the settlement figure. This figure represents the amount left to be paid on your current finance agreement.
- Get a Vehicle Valuation: Seek a valuation for your current vehicle. This valuation will help determine if your vehicle is valued more or less than the outstanding finance amount.
Assessing the Valuation: Equity vs. Negative Equity
Equity: If the vehicle’s valuation is higher than the remaining finance, congratulations! You’re in a position of equity. This equity can be used as a deposit for your next vehicle.
Negative Equity: However, if the valuation is less than the outstanding finance, you are in a state of negative equity. In this scenario, you have a few options to consider.
Options for dealing with negative equity
If you find yourself in a situation of negative equity, you have several viable options:
- Continue the Current Finance Agreement: Keep making payments until you reach a point of equity.
- Pay off the Balance: Consider paying off the remaining balance yourself.
- Roll Over the Negative Equity: Depending on your credit score and the type of finance agreement, you may have the option to add the remaining balance to your new finance agreement.
Alternatives to part exchange
- Private Sale: Pay off the settlement figure independently and sell the vehicle privately.
- Sell to a Vehicle Buyer: Explore selling options with vehicle buyers for a no-obligation valuation. >>Get Your Valuation
- Voluntary Return: If your finance agreement allows, return the vehicle to the finance company without further payments.
Part exchanging a vehicle on finance is a feasible option, allowing you to upgrade to your desired vehicle. Understand the financial dynamics involved, assess your equity or negative equity situation, and choose an option that aligns with your preferences and financial circumstances.
By following our comprehensive guide, you’ll be well equipped to navigate the part exchange process smoothly and make an informed decision regarding your vehicle upgrade.