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If you're thinking about changing your car before your finance agreement ends, you might be wondering whether you can still part exchange it.
The good news is that, in many cases, the answer is yes. However, the process depends on how much finance you have left to pay and how much your current car is worth.
In this guide, we'll explain how part exchanging a financed car works, what happens to your existing finance agreement, and what your options are.
Yes, you can part exchange a car on finance.
Many drivers part exchange their car before their finance agreement ends. The dealership will assess the value of your vehicle and calculate how much is still outstanding on your finance agreement.
From there, one of three things will happen:
The outcome determines how much equity you have and what you'll pay towards your next vehicle.
The process is usually straightforward.
If there's outstanding finance, the dealership will normally settle it directly with the finance provider as part of the transaction.
A settlement figure is the amount needed to pay off your finance agreement in full on a specific date.
It may differ slightly from the remaining monthly payments because it can include:
Your finance provider can provide an up-to-date settlement figure at any time.
Positive equity means your car is worth more than the amount remaining on your finance agreement.
For example:
Positive equity: £3,000
This amount can usually be used as a deposit towards your next vehicle, helping to reduce your monthly payments.
Negative equity occurs when your car is worth less than the amount you still owe.
For example:
Negative equity: £2,000
In this situation, you may need to:
Your options will depend on your lender and the vehicle you're purchasing.
Yes.
If you have a Personal Contract Purchase (PCP) agreement, you can usually part exchange your vehicle before the agreement ends.
The dealership will calculate your settlement figure and compare it with your car's current market value.
If you've built positive equity, it can often be used as a deposit towards another vehicle.
Yes.
The process is similar for Hire Purchase (HP) agreements.
The dealership will request your settlement figure and use the value of your current vehicle to clear the remaining finance where possible.
Not necessarily.
Many drivers change their vehicle before the agreement ends, particularly if:
The best time to change depends on your individual finance agreement and your vehicle's value.
When part exchanging a financed vehicle, you'll usually need:
Having these ready can help make the process quicker.
If you're thinking about upgrading your current vehicle, Eden Motor Group can help.
Our team can value your car, obtain your finance settlement figure and explain your options clearly, whether you have PCP, HP or another type of finance agreement.
Browse our range of new and used vehicles or contact your nearest Eden Motor Group dealership to discuss your part exchange.
Established in 2008, we strive to create a better world of motoring and provide our customers with an unparalleled level of customer service.
Buy your next vehicle online today from the comfort of your own sofa.
Eden Automotive Ltd/Eden Motor Retail Ltd is a credit broker not a lender. We work with a number of carefully selected lenders who may be able to offer you finance for your purchase. The lender will pay us a commission for arranging finance for you. The commission amount will be disclosed to you in good time before you enter into the agreement. You will be required to provide your consent to the commission before proceeding. The lender will require a credit check and conduct an affordability assessment before making any offer of finance to you. All finance is subject to status. Terms and conditions apply.
FCA number: 305868/471208.