How to Part-Exchange a Car on Finance - The Ultimate Guide

Part-exchanging a car that is under finance is a common practice that allows you to trade in your current vehicle and put its value towards a new car. This ultimate guide will walk you through the process of part-exchanging a car on finance and provide you with valuable insights to make the most of this transaction.

Understanding Part-Exchange

Part-exchange involves trading in your current car to a dealer and using its value as a down payment for a new vehicle. When you have a car on finance, the part-exchange process becomes slightly more complex, but it is still possible to trade in your financed car.

The Process of Part-Exchanging a Car on Finance

Here are the key steps involved in part-exchanging a car on finance:

1. Evaluate Your Financed Car: Assess the current value of your financed car by considering factors such as its make, model, age, mileage, condition, and market demand.
2. Research the New Car: Determine the make, model, and specifications of the new car you intend to purchase through part-exchange.
3. Contact Dealerships: Get in touch with dealerships that offer part-exchange services and provide them with details of your financed car and the new car you are interested in.
4. Obtain Part-Exchange Valuations: Dealerships will assess the value of your financed car and provide you with part-exchange valuations. Compare offers from different dealerships to get the best value.
5. Negotiate the Deal: Once you receive part-exchange valuations, negotiate the terms of the part-exchange deal, including the value of your financed car and the price of the new car.
6. Settle the Existing Finance: If the part-exchange valuation is higher than your outstanding finance amount, the dealership can settle the finance on your behalf. If the valuation is lower, you'll need to pay the difference.
7. Complete the Paperwork: Finalise the paperwork for the part-exchange transaction, including transfer of ownership, settling the finance, and documenting the details of the new car purchase.
8. Drive Away in Your New Car: Once the paperwork is complete and the finance settlement is resolved, you can drive away in your new car!

Considerations for Part-Exchanging a Car on Finance

When part-exchanging a car on finance, keep the following considerations in mind:

• Outstanding Finance: If there is outstanding finance on your current car, you'll need to settle it during the part-exchange process.
• Equity or Negative Equity: Consider whether there is any equity (positive or negative) in your financed car, as it will impact the part-exchange deal.
• Comparison Shopping: Obtain part-exchange valuations from multiple dealerships to ensure you get the best possible offer.
• New Car Negotiations: Remember to negotiate the price and terms of the new car purchase in addition to the part-exchange deal.
• Documentation: Keep all the necessary paperwork in order, including ownership documents, finance settlement details, and new car purchase documents.

Part-exchanging a car on finance can be a convenient way to upgrade your vehicle while managing your existing finance agreement. If you have any questions or need assistance with part-exchanging a car on finance, CarOwl is here to help.

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