How easy is it to swap cars on finance deals?

Jlawson118

Before I cut to the chase, I’m wanting to borrow more against my car finance and change my car. I’m wondering what the likelihood of keeping the same interest rate would be? As well as how easy is it to change a car over on an agreement? 

Basically I currently have a BMW 330e. I paid a large deposit on purchase and pay £251 per month at around 2.9% which is a great rate that I secured March 2021.
I love the car but the whole plug-in-hybrid concept isn’t working out for me. It’s hassle to charge, due to the battery I have very limited boot space which I have a baby on the way now and think it will struggle with a pram, and all in all I’m realising it’s costing me more to run than its petrol or diesel equivalent.

So speaking of which, I’m looking at speaking to my BMW dealership and looking to swap it over to the petrol or diesel equivalent. As I do love the car itself.

Running quotes online are significantly more due to higher interest rates obviously, but there’s less equity in my current car, interest rates are higher, current quotes are coming up at almost double per month than what I’m paying now.

Now I’ve been expecting to pay a little bit more, and my intentions will be to buy a car that lasts me 10/20+ years now. My overall outgoings in general are about to drop significantly so I can afford slightly more but I don’t want to be silly either as I’m hoping to save harshly.

What are the chances I could stay on a low interest rate? 

Will credit checks be run again like a fresh application? (As I currently have a separate loan and credit card that will be paid off after the sale of a property, so would still show for some time after sale which is due soon)

I know every car dealer and financial services would be different but I’m completely new to car finance as this is the only car I’ve ever done this with

TadleyBaggie

What type of finance, PCP?  Highly likely the finance will need to cleared and new financing taken at the prevailing rate. 

DrEskimo

As above. You will be looking at ending your current finance early (by requesting an early settlement fee and trading the car in at a set price and the dealer using that to settle the finance), and then entering a new finance contract. 

You will likely be better off finding the best price for your current car through a dealer/garage/online broker, settling the finance, and then using any cash savings to buy the replacement. Next best would be an unsecured loan at the best rate you can get accepted for. 

All in, changing cars is going to cost you far more than you’ll save on fuel running costs moving from a 330e to a 330. 

Edi81

You can’t just switch cars and keep the same agreement. 

You will need to take out new finance at current rates which as you know are higher than the super cheap 2.9% you got in 2021. 

MalMonroe

In 2019 I actually DID just switch cars and was allowed to keep the same agreement. BUT I did it about two weeks after I'd signed up for the initial vehicle. And the salesman wasn't happy - too much paperwork involved for his liking - but I negotiated with the finance team on the phone and they said it was no hassle. No extra credit checks were made at that time - although I appreciate it was only a two week period. I paid a £2k deposit, so you can tell it's not a BMW. I got what I consider to be a great deal at that time, a very small monthly payment (never seen any deal like it since) and 0% interest for 12 months. After the 12 months they offered me a good deal with small interest payment and I'm now onto my third year with them and still have the car, it's a Toyota with Toyota finance.

The only problem with a PCP or any other kind of hire purchase agreement is that it indicates, via your credit history, to lenders that you are not able to pay for a car outright. If that doesn't bother you then that's fine.

If you're having a child - congratulations by the way - you may feel that you could go for a cheaper car with a lower PCP agreement and a larger capacity for carrying all the baby's equipment. I'd recommend mine but it's only a Toyota Aygo and the boot space is small. But there must be more practical motors out there at more reasonable prices. I'd advise shopping around, it's easy to do online. 

Just my own opinion obviously but hopefully a bit of food for thought. I wish you all the best with everything. 

Jlawson118

MalMonroe said:

In 2019 I actually DID just switch cars and was allowed to keep the same agreement. BUT I did it about two weeks after I'd signed up for the initial vehicle. And the salesman wasn't happy - too much paperwork involved for his liking - but I negotiated with the finance team on the phone and they said it was no hassle. No extra credit checks were made at that time - although I appreciate it was only a two week period. I paid a £2k deposit, so you can tell it's not a BMW. I got what I consider to be a great deal at that time, a very small monthly payment (never seen any deal like it since) and 0% interest for 12 months. After the 12 months they offered me a good deal with small interest payment and I'm now onto my third year with them and still have the car, it's a Toyota with Toyota finance.

The only problem with a PCP or any other kind of hire purchase agreement is that it indicates, via your credit history, to lenders that you are not able to pay for a car outright. If that doesn't bother you then that's fine.

If you're having a child - congratulations by the way - you may feel that you could go for a cheaper car with a lower PCP agreement and a larger capacity for carrying all the baby's equipment. I'd recommend mine but it's only a Toyota Aygo and the boot space is small. But there must be more practical motors out there at more reasonable prices. I'd advise shopping around, it's easy to do online. 

Just my own opinion obviously but hopefully a bit of food for thought. I wish you all the best with everything. 

I bet they could exchange yours as it was in the 14 day grace period? But not 100% sure, glad you did manage to swap easily enough though! 

About it jumping onto my credit, within a few months that will be the only debt I would have on my credit reports!

I've just emailed my last BMW dealer who sold me the car last time and he has explained I would have to essentially start a new deal, just as most people on here have mentioned. But I am also looking at cheaper options too, guess with a baby on the way I have to grow up a bit now too 😂

Thank you for your kind words and I wish you the best too 

Herzlos

The way car prices have gone you may find that you're not too far in a hole with the 330e, though in the same vane you may find a better deal on a new car than a used one.

If you're not too bothered about the badge or stupid car names, then a new Dacia Jogger is a crazy good value family car buy.

But you're very much looking at selling the current car and taking out a new deal.

Of course, a 3 series BMW should still be big enough to handle a single kid + buggies and they grow out of the basinette stage pretty quickly. It's also probably significantly cheaper buying a compact buggy than a bigger car too.