Outstanding Car Finance Options
If you’ve got outstanding finance on your current car, even if you’ve only had it a short period, and you want or need to change it, then there are several options available to you.
Get the dealer to settle it
As long as your chosen dealer has the right license then they can manage the settlement for you. With this option the settlement value can be transferred to a new finance agreement on your new car.
Alternatively you could pay the cash to your dealer to settle it as part of your new deal.
Settle it yourself
If you’ve got the cash then you can always settle it yourself. Under most agreements you get a rebate of interest if you’re paying the loan off early. Then you can part exchange the car as normal. However you’ll need to ensure that you get a letter from your finance company saying you’ve settled the agreement.
Keep on paying the agreement
If you have a personal loan agreement on your current car then you own the car instead of the finance company, so you could keep paying the agreement whilst opening a new agreement on your new car.
However it can be confusing having two direct debits each month and this is only an option with agreements not secured against the vehicle. So careful consideration needs to be given to this option.
What if you owe more than your car is worth?
When you owe more on your finance than your vehicle is current worth its often referred to as negative equity. If you find yourself in this situation then the same options above are available to you.
We have finance companies who, subject to status, will finance more than the value of your new car. Allowing you to re-finance your negative equity in the agreement for your new car.
Can you hand your car back to the finance company?
Some finance agreements give you protection through the Halves & Thirds Rule. Under these types of agreements you will have the option to voluntary terminate your agreement as long as you have paid over half of the total amount of your agreement (deposit and payments).
This will be noted on your agreement, but it’s always best to check your situation thoroughly to ensure this is the best option for you.
So what's next?
You can enter your settlement into our budget calculator, as well as the value of your current part exchange, to find out what you can afford, even if you have negative equity.