Can you swap finance from one car to another??

No, you cannot swap finance from one car to another. Car finance agreements are tailored to you, your lender, and the specific vehicle. Each loan is designed based on the car’s make, model, age, and condition, making it unsuitable for a different vehicle.

Transferring finance isn’t allowed because each agreement corresponds to your financial situation at the time of signing and the repayment terms you accepted. While you can’t simply switch cars under the same finance agreement, you can acquire a new car before completing your repayment period. To do this, you must first settle your existing finance agreement before entering a new one for your next vehicle.

Why can’t you transfer car finance to another car?

You can’t transfer car finance to another car because your finance agreement is linked specifically to that vehicle. Your lender tailors your deal based on your financial circumstances and the chosen car's make, model, and condition.

If you change your vehicle, this information becomes invalid, and the lender must reassess your application with the new details. Each finance agreement is designed around specific criteria, such as the vehicle's value and your financial situation at the time of signing.

For example, hire purchase (HP) and personal contract purchase (PCP) loans depend on the car's value. With HP, you borrow the full purchase price minus any deposit, while with PCP, you borrow the predicted depreciation value during the loan term. These calculations are specific to the vehicle in question and will not apply to another car. Further terms may also affect your agreement, including the vehicle's age, mileage, and condition.

Can I change my car before my finance ends?

Yes, you can change your car before the end of your car finance agreement, though it’s not as simple as just trading it in. Car finance agreements can last between two and five years, and during that time, life circumstances can change significantly.

To change your car, you must first settle your car finance to become the legal owner. Once you’ve done this, you’re free to sell, modify, or trade it in as a part exchange. While it may require some extra steps, changing your car before your finance agreement ends is certainly possible!

What you can do if you’d like to swap a financed vehicle

Payment of the settlement figure

If you want to swap a financed vehicle, start by contacting your lender to request a settlement figure. This amount represents what you still owe on your finance agreement, including any interest. You must pay off this debt in full to become the legal owner of your vehicle.

Keep in mind that financial service providers often limit how long this settlement figure remains valid. Before making any payment, carefully review your agreement. Look for potential charges for early repayment or excessive wear and tear. Doing your research will help you avoid unexpected costs!

Voluntary termination

If you're struggling with car finance repayments and can’t afford the settlement figure, you can cut your losses by opting for voluntary termination. Under UK law, you have the right to terminate your car finance contract once you’ve paid at least 50% of the total amount payable. This includes your loan repayments, interest, and any fees—not just the car’s value.

In a personal contract purchase (PCP) agreement , you must also reach the 50% threshold, which includes the one-off balloon payment. You don’t have to wait until you hit this threshold; you can pay the difference to reach 50% sooner.

To exercise your right to voluntary termination, contact your finance company. If you’ve met the 50% requirement and the car shows only standard wear and tear, you can return the keys and walk away without further obligations.

Refinancing your car

If you want to keep your current car but swap the finance, consider refinancing your car finance. Refinancing allows you to take out a new loan to pay off your existing finance and start fresh.

You could secure a longer loan term with lower repayments or find a better interest rate if your credit score has improved.

However, remember that lower repayments over a longer term might not be cheaper overall due to additional interest costs. If your financial circumstances have changed but you still love your car, refinancing could help you find a finance deal that fits your new situation.

Part-exchanging on finance

Part-exchanging a car with outstanding finance works similarly to selling; you cannot trade in a financed car without settling the loan first. Depending on your agreement's terms and the dealership, the finance settlement might be included in the trade. The dealership may even offer to pay the settlement figure on your behalf and set up a new finance agreement for your new vehicle.

If your car is worth more than the settlement figure, you’ll have positive equity, allowing you to apply the difference toward your new car. Conversely, if it’s worth less, you may need to make a cash contribution for the dealership to accept it.

Part-exchanging can be quicker and easier than other options, as the dealership handles much of the work for you. However, it may not always provide the best deal, so weigh your options carefully.

Call us to get advice on car finance

If you’re unsure about arranging your car finance, we’re here to help. Understanding your options is key to making confident financial decisions, and sometimes, expert advice makes all the difference.

Carplus can guide you through various financing options for your auto purchase. Whether you have questions about the best agreement for you or need to discuss anything from instalment  loans to delinquency, our specialists are ready to assist. Reach out today!