Can I Swap My Car On Finance?

When you take out a vehicle on finance, you’ll probably be spreading the repayments over a number of years. And during this time, it’s not uncommon to start thinking about getting another car, particularly if a brilliant new model comes out! The question is, are you able to swap vehicles, while you’re still in an open agreement?

If you’ve not yet entered into a finance deal, but are just exploring your options, it’s also good to have the answer to this question, particularly if you’re thinking about entering into a long contract. We’ve explored the topic of swapping cars on finance in more detail below:

Can You Change a Car on Finance?

Unfortunately, you can’t really exchange or swap a vehicle that is still being paid off through a Hire Purchase (HP) or Personal Contract Purchase (PCP) agreement. As the contract hasn’t finished, and in the case of a PCP deal, you won’t have made the balloon payment, you don’t own the car outright.

Because the car still belongs to the lender, you’d need to settle the balance before you could enter into a new agreement and swap vehicles. That’s not to say you’d need to have the outstanding amount in cash – there are a few available options to consider.

What are Your Options?

Once you’ve decided that you want to swap your vehicle, the first thing you’ll need to do is contact the lender, and ask for a settlement figure. This figure may not last for more than a few weeks, so try to request it shortly before you get your next vehicle. Once the settlement figure is finalised, you can explore the three options below:

swap cars


1. Settle the Balance

If you have the funds available, this is certainly the simplest way of getting a new car when you’re already in a finance agreement. Depending on how far you are into the agreement though, this could be a lot of money. You can settle the balance of your loan, sell it on, and then look into getting your next vehicle.

2. Sell Your Car

Rather than settling the balance yourself, once you have the settlement figure, you can sell the vehicle and pay the figure with the resulting funds. The hope is that as you’re selling the vehicle at market value, this will be enough to cover the loan balance. Otherwise you’ll need to make up the difference yourself.

3. Part Exchange the Vehicle

Similar to selling your car, you can part exchange it with a dealer. Once you hand over the keys, the dealer will pay the settlement amount on your behalf, and you can finance a new vehicle with them. Essentially, part exchanging a car means you can use any positive equity you’ve earned to finance your next set of wheels.

Can You Modify a Car on Finance?

If you don’t want to swap your vehicle, but are looking to make modifications to it, it’s good to know what your options are. The simple answer is that you may be able to modify the car, but you will always need to speak to the lender beforehand. Because you don’t technically own the vehicle, either until the end of your contract with a hire purchase deal, or after making a balloon payment with a PCP agreement, the finance company has the final say in regards to modifications.

If you were to make modifications to the vehicle without first confirming them with the lender, you may void the terms of the agreement. This would mean that the lender could ask you to settle the balance in full. And if you weren’t in a position to do this, they’d have the option of selling the car at auction, leaving you liable for any outstanding balance once sold.

If you do decide to make modifications to your vehicle, it’s sensible to get confirmation from the lender in writing. That way, if you’re questioned later down the line, you can prove that you had permission to modify the car.

car mods

What Classifies as a Modification?

When it comes to modifying your vehicle, it’s important to understand what this actually means. Something you may not consider to be a true modification, as it’s technically reversible, could end up voiding your contract.

Essentially, a modification is anything that can impact the value of the vehicle, whether it’s increasing or decreasing the value. This could include things like cosmetic changes, such as paint, wraps, spoilers, body kits, or lights, as well as performance enhancements, like upgrading the suspension or exhaust. Putting in a new stereo or speaker would also be classed as a modification.

The key thing to remember is that no matter how minor the change, it’s worth speaking to the lender first. If the modification is likely to increase the value of the car, they may agree to it, and you won’t be putting your agreement at risk.

Financing a Car Through Vehicle Finance Today

If you’re looking to enter into a new finance agreement, either because you simply want a new vehicle, or because you’re unable to make the modifications you’d like to, Vehicle Finance Today can help! Our online application is short and straightforward, and shouldn’t take too long to complete.

We’ll compare our panel of lenders for you and do our best to put you in touch with a suitable loan provider. If approved, you could be driving your new set of wheels in just a few days! Apply with us today, with no fees, and no impact on your credit score!

Looking for Vehicle Finance Options?

Applying for finance through us should only take a few minutes, and won’t impact your credit score. So what are you waiting for?


Get in Touch

Want to discuss your options, or learn more about the application process? Our friendly team are ready to help!