Buying a new car on finance?

kingoftherodeo

Hi All

Im looking to buy a new car using on of the finance options available, not sure which yet.

I currently have a car on finance which I could sell and pay off the finance, but im unsure what the best way to go about this is.

Should I...
A. sell my current car privately and pay off the loan, then take out a new finance agreement with the dealership.

B. Use my car in part exchange and continue to pay that off and pay the additional finance on the new car?

Either way I want to be cautious of my credit rating so which ever would be cleaner is my preferred option. im just not sure how to go about this.

Or is this a big no no anyway?

Thanks

AdrianHi

If you trade the car in at a dealer it's no real problem as they deal with this situation all the time. The outstanding loan amount will be factored into the deal come trade in and the dealer will probably handle settling the outstanding finance for you.
For private buyers, it depends on the buyer. You might get a buyer to agree to pay some of the car's price to the finance company clearing the debt and the balance to you. It's probably simpler to clear the finance yourself so as to not scare off more nervous buyers.

So long as the debt is settled in accordance with the terms of the agreement you won't have any credit rating worries.

Money_Grabber13579

If you go for B, I don't think this would be allowed to happen, as you'd have 2 finance agreements at the same time. Also, the person who eventually bought your car wouldn't be able to get finance on the car, as you are still paying for the car. Therefore, if the worst happens, which finance company picks up the car?!

A is definitely the better option.

Pew_Pew_Pew_Lasers!

If you can, sell your car privately. Its one less thing for the dealer to worry about.

Don't rely on the dealer finance, it will invariably be poorer than what you can get by yourself.

kingoftherodeo

Thanks for your replies, much clearer!

Hintza

As Pew Pew says selling privately is probably the best option, but has the hassle factor, so check what you are being offered as a trade in first and then decide if you want the hassle.

If you decide to sell privately the biggest danger is you ask too much so take some advice on best price to market it at. Too many folk think their cherished car is worth more than it really is.

kingoftherodeo

Hintza wrote: »

As Pew Pew says selling privately is probably the best option, but has the hassle factor, so check what you are being offered as a trade in first and then decide if you want the hassle.

If you decide to sell privately the biggest danger is you ask too much so take some advice on best price to market it at. Too many folk think their cherished car is worth more than it really is.

Yeah agreed. I'll check the Parker guides and do some research first.

Thanks

DCodd

Remember that should a potential private buyer do a HPI check on your car it will flag up as having outstanding finance on it. So be prepared, as mentioned by AdrianHI, to accept the amount outstanding being paid by cheque in the name of the finance company. Any private buyer should insist on this!

kingoftherodeo

Well it won't because I have a personal loan not a dealership finance agreement?

DCodd

kingoftherodeo wrote: »

Well it won't because I have a personal loan not a dealership finance agreement?

Ahh you said finance in your first post.

Thats ok then - I would try and sell privately first then!

Good Luck

kingoftherodeo

Yeah sorry a little confusing, I have a loan on current car then looking to take finance on the new one...