How does part ex-ing your car work with exisiting finance?

I have had my car for 15 months and still owe finance on it of £18000. I want to buy a different car, can I simply go into a showroom and part ex mine although I still owe on it . Whats the best way to do it? Can you part ex against approved used cars?


Do I sell the car, pay off the finance, start again?


or


Do I part ex my existing car, and let the finance company do the rest (can they do that?!)





Help a really confused guy who wants a new car but doesn't know how the hell to do it!

How does part ex-ing your car work with exisiting finance?
It depends on how much your new car costs. If it is as much or more in value to the outstanding debt then whoever you part ex with will pay off the existing finance and take out another finance agreement for the new car and the outstanding balance of the old one.


In other words you would be exchanging one credit agreement foe another and would probably end up paying more than you do now.


My advice would be to ring whoever you have your car finance with and ask them for a settlement figure. Then if you can afford it pay the debt off and start afresh.


In doing this your bargaining power with potential dealer will be greatly enhanced as dealer will be falling over themselves to offer you finance on a new car.


You will hold all the card and be in a great bargaining position so haggle hard and most importantly shop around for finance. Sometime you will find banks offer better finance deal than dealer can.


all the best Andrew D.
Reply:your quoting pounds but I'm assumign the system works the same here as in the UK. rule of thumb is if the value of teh car is greater than what you owe, then go ahead and nock yoruself out.





however if you owe more than it is worth then you are goign to end up financing for much more than jsut the value of yrou new car and this is a really bad idea. if this is the case keep yrou car and pay down on it until you no longer upside down on yoru loan.
Reply:Exactly what Briggs said. Don't get upside down on a vehicle. It will only cause you more headaches down the road. If you have the money to make up the difference then I'd go for it. But if you owe something like 5K more than it's worth I would shy away.
Reply:very easy





take the value the dealer offers for your car





subtract the £18000 finance settlement





the balance, whether positive or negative is the actual equity you have to put towards another car.





All 3 of the above answers are correct. If you have a negative equity, you really should hang on to the car a bit longer, or you will in effect pay interest on the previous loans interest. Interest on cars is usually loaded up front, less early settlement rebate ( now it gets tricky ) If you have too much negative equity, and do not want to put any more cash into the new agreement, you will have to keep the next car for a considerably longer time than you would like to

lilac