Can you switch car finance companies?
If you are in the middle of a financial agreement involving a car's ownership, you may find yourself in a situation that requires you to seek changes in your monthly payments. One option to help with this is to seek an alternative lender, but can you switch car finance companies during a loan.
Can you switch car finance companies or car loans to another bank
Although it can be difficult, the simple answer is yes, you can switch loan provider and it doesn't matter whether you have a car on Hire Purchase (HP) or Personal Contract Purchase (PCP).
How can you switch car loans to another bank
Step 1 - The first thing you'll need to do is get a finance settlement figure from your current lender. This figure determines the cost of the car that's not yet been paid off as well as the final “balloon payment” you will need to pay.
Step 2 - Your car will then be valued to find out the current valuation of the car vs the remaining payments.
Step 3 - A little maths will be needed as you'll need to subtract the settlement figure from your car's valuation price i order to determine the amount of equity in your car. If you have a positive figure then you can use this amount of money as a deposit toward your new car. However, if you have a negative figure, that amount of money will need to be paid on top of your car's new price.
Voluntary Termination
Voluntary termination is another possibility if you're looking to change your car halfway through your current finance agreement. In order to terminate the contract, you must pay or have paid at least half of the total amount owed to the finance company before you can switch car loans to another bank.
In order to terminate the contract with the 'Halves Rule', you must comply with certain rules, such as bringing up to date any payments that are owed, and returning the vehicle in a reasonable condition.
How Broker4Cars can advise on how to switch car finance companies
If you're considering getting a new finance provider your car, then Broker4Cars can help you secure a better deal.. Simply contact us on 01773 512806 or fill in the below form to see how we can help you.
