About a year ago I purchased a second-hand car using car finance from a company called Moneybarn who I found through a finance broker.
Moneybarn specialise in people like myself in that they will lend to people with a bad credit history and I have bad credit.
They were one of only a few companies that were willing to lend to me.
After a year of having my car and making my repayments, I was wondering theoretically if I could change my current car on finance and get another car.
My current car (a Vauxhall Corsa) uses a lot of petrol in comparison to my old Diesel Ford Focus. I only got rid of the Focus because of the repair bills and insurance costs.
This was quite possibly the worst decision I could have made and was at the least short sighted.
Getting a Settlement Figure for your existing Car Finance
The first thing I did was to contact the finance company Moneybarn and ask for a settlement figure. This settlement figure is how much I would need to pay back to Moneybarn in order to pay off the outstanding finance.
I received the settlement figure and armed with this information I could proceed onto the next step.
Finding out how much I would get for Part Exchange
The next step was to find out how much I would get if I part exchanged my current car. I was hoping that my car would be worth at least the settlement amount and then some more.
I received the part exchange offer amount and it worked out that I would be left with £50 after paying off the car. However because I have bad credit my total payments for the year were £2576.40 plus my initial deposit which meant I had already paid nearly £3600. That’s a lot to pay for one year of having the car.
Once I worked that out I realised that it would be a big mistake to change my car and throw away all that money. Instead I will stick with the car until it is paid off.
However if you are wanting to change your car on finance you need to: –
1. Get a settlement figure from your current finance provider.
2. Find out how much your existing car is worth as a part exchange or trade in.
3. Find a new car and the dealer will sort out the new finance and paying off the existing finance.
That is all there is to it. Getting approved might be tricky, especially if you have bad credit. However your existing lender may be able to help, assuming you have been making on time payments.
The chances are though that you would be better of sticking with your current car, unless you are very close to paying off your existing car finance.
