Yes, even if you have outstanding finance on your car, you may be able to get a new one before your agreement ends.
It all depends on your personal circumstances and the type of car finance agreement you have, but there are three main options you could consider:
Pay the settlement figure
You can end your existing agreement by paying the settlement figure. You can usually find your settlement figure on your finance agreement or you can contact the lender directly to find out how much it’ll cost to settle your loan in full. Typically, the further you are into your agreement, the lower your settlement figure will be.
Opt for Voluntary Termination
Under UK law, you have the right to choose voluntary termination and hand the car back as long as you’ve paid 50% of the total amount payable. This doesn’t just mean 50% of the amount you’ve borrowed though, it also includes any fees, interest, and the balloon payment if you’re in a PCP agreement.
Refinance your car
Refinancing is when you take out a new finance agreement to pay the balance on your existing car finance loan and get a new one. You’ll be able to settle your current finance with a one-off payment and, depending on the deal, this payment could be covered by the new lender or incorporated into your new loan amount.
What if I’m in negative equity?
If you’ve found yourself in negative equity, don’t worry – you don’t need to be stuck there forever! Here at CarFinance 247, we work with a panel of lenders and some of them can provide negative equity car finance. With these loans, you’ll be able to combine the cost of clearing your negative equity and the price of a new car into one monthly payment.