Representative Example: You could borrow £10,699 over 60 months with an initial payment of £495.89 (including £199 Admin Fee) followed by 58 monthly payments of £296.89 with a final payment of £495.89 (including optional £199 Option to Purchase Fee). Total amount repayable will be £19,012,40. 26.1% APR, annual interest rate (fixed) 13.3%.
How to part exchange a car
Part exchange is when you use the value of your current car to help pay for a new one. You trade in your old car, and the dealer takes that amount off the price of the car you want to buy. It’s a popular option when upgrading to a newer vehicle. You can also part exchange a car even if it’s still on HP car finance.
If your car is fully paid off and not tied to any finance agreement, part exchanging it is usually very straightforward. You already own the car outright, which means the full value of your vehicle can go directly towards the cost of your next one.
You simply take your current car to the dealership and ask for a valuation. If you’re happy with the offer, that amount is taken off the price of the car you want to buy. The dealership handles all the paperwork, and there’s no need to involve a finance provider.
Just make sure you take some time to prepare your car and gather the necessary documents before visiting the dealer. A clean, well-maintained vehicle with a full service history is more likely to receive a stronger valuation, helping you get more money off your next car purchase.
Yes, you can part exchange a car that is on hire purchase finance. The process is slightly different, but it’s very common.
Here’s what happens:
This process of switching from one finance agreement to another is often called a “settlement and replace” process. It means your current finance agreement is settled using the part exchange value of your old car, and you start a new agreement for your next vehicle.
In most cases, the dealership will handle the finance settlement for you. They’ll contact your finance provider, get a settlement figure, and deduct that from your car’s trade-in value. Any leftover equity can go towards your next deal. If you’re in negative equity, you may be asked to pay the difference or roll it into the new agreement.
Even though the dealer manages the process, it’s important to check that your previous finance is fully settled. Always ask your finance provider for written confirmation to avoid any unexpected charges or missed payments later on.
Equity is the difference between your car’s current market value and the amount you still owe on your finance agreement. It plays a big role in whether part exchanging your car is a good option right now.
If your car is worth more than your remaining finance balance, you have what’s called positive equity. For example, if your car is valued at £7,000 and your settlement figure is £5,000, which gives you £2,000 in positive equity. You can use this amount as a deposit towards your next car, which could help reduce your borrowing and lower your monthly payments on the new finance deal.
If your car is worth less than what you still owe, you’re in negative equity. For instance, if your car is worth £4,000 but your finance balance is £6,000, you're £2,000 short. In this case, you’ll need to either:
Negative equity is something to consider carefully. Adding the shortfall to a new agreement means you’ll start your next agreement already owing more than the car is worth, which could affect your options in the future.
Equity gives you a clear picture of your financial position before changing cars. It helps you understand how much value, if any, you’re carrying forward into your next deal. This can shape what options are realistically available to you.
If you’re planning to part exchange, knowing your equity helps you:
Equity is about more than just numbers, it helps you decide the right time to upgrade your vehicle. Even a small amount of equity can make a big difference in how flexible your finance options are.
Getting a good valuation on your current car can lower the cost of your next one and improve your finance options. The better the deal you get on your part exchange, the less you may need to borrow, which could mean lower monthly payments or a shorter agreement. Here are some simple tips to help you get the best possible value:
Clean your car inside and out to make a good impression. Fix any small issues like scratches or worn tyres, as these could lower the value. Make sure you have all documents ready, including the logbook (V5), MOT, service records, and spare keys.
Don’t rely on just one offer. Use online valuation tools to get a rough estimate, then visit a few dealerships for in-person quotes. This helps you understand your car’s true value.
If one dealer offers more, let others know. You can use better offers to negotiate and try to get a higher price, especially if you’re also buying your next car from them.
Taking a little time to prepare, research, and compare offers can make a real difference to your part exchange deal.
Yes, you can sell a car that’s on finance, but you must get permission from your finance provider first. You don’t legally own the car until the finance is fully paid off, so you’ll need to take a few steps before selling it privately.
You’ll need to:
It’s important to make sure the finance is fully settled before handing over the car. If it isn’t, the buyer won’t legally own the vehicle, and you could face serious legal or financial consequences. Always get written confirmation from your provider that the agreement has been cleared before completing the sale.
You can sell your car to We Buy Any Car or similar services even if it's still on finance, but it depends on the type of agreement you have.
We Buy Any Car will usually handle the finance settlement for you if you provide them with the correct details. Just make sure you don’t agree to a sale until you know exactly how much is left to pay and whether it’s the right time to sell.
