How to Upgrade Your Car While Still on Finance
Thinking about changing your car before your finance ends? Learn how upgrading works, from voluntary termination to part exchange.
If you’ve been driving the same car for a while, it’s natural to want an upgrade — maybe something newer, more efficient, or better suited to your needs. But what if your car is still on finance? The good news is that upgrading while still in a finance agreement is entirely possible; you just need to understand your options.
Check Your Finance Agreement
The first step is to review your finance agreement. Whether you’re on a PCP (Personal Contract Purchase), HP (Hire Purchase), or a personal loan, the terms will affect how you can change cars. Look for details on settlement figures, early repayment clauses, and part exchange terms.
Option 1: Settle Your Finance Early
You can contact your finance provider and request a “settlement figure” — the amount needed to pay off your agreement in full. Once paid, you’re free to sell or trade in your car. However, this option can come with additional costs if you’re early in your finance term.
Option 2: Part Exchange
Many dealerships allow you to trade in your current financed car for a new one. They’ll value your car and, if it’s worth more than your remaining finance, the difference can be used as a deposit on your next vehicle. If it’s worth less, you may need to pay the difference.
Option 3: Voluntary Termination (PCP/HP)
If you’ve paid at least 50% of your total finance amount (including interest and fees), you may be eligible for voluntary termination. This lets you hand the car back to the lender and walk away without further payments — though you won’t own the vehicle.
Tips for a Smooth Upgrade
- Check your car’s value: Use online valuation tools to see if you’re in positive equity.
- Compare deals: New finance offers could have better rates or lower monthly payments.
- Consider timing: The closer you are to the end of your term, the easier it is to upgrade.
In Summary
Upgrading while on finance is possible — and often simpler than you might think. By understanding your current deal and exploring your options, you can get behind the wheel of something new without financial stress.
