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Change car while on loan

nicad 22/08/2021 656

Change car while on loan

Change car with a current auto loan

When you buy a vehicle, you can use a loan. Thus, you will finance the vehicle by monthly payment and its price will be leveled. If you want to change vehicle or resell your vehicle while on credit, this is also possible!

When purchasing their vehicle, the owner may have taken out two different loans.

Auto loan

The affected auto loan is a loan from a bank linked to the purchase of the vehicle. The advantage of auto credit is that it allows you to get a vehicle quickly. It is often exercised when purchasing from a professional (dealer). The monthly car loan payments are fixed and come with interest to be repaid over several years. The entire amount of the vehicle can be paid via the car loan.

In the case of subscription to this contract, it is necessary to pay attention to the clauses mentioned in the contract in order to know if this one authorizes or not the resale of the vehicle. In some cases, it is possible to pay off all the monthly payments at once, while in other cases there is an additional penalty.

Resale of the vehicle may be authorized under certain conditions (such as reimbursement of all monthly payments inherent in the purchase of the vehicle).

The personal auto loan

This loan is often chosen in the case of car sale between individuals. The contract is much more flexible because it is in no way linked to the purchase or possession of the vehicle.

Thus, if you have opted for a personal loan when purchasing your vehicle, it will be much easier to resell your car afterwards. Obviously, your loan will have to be repaid with the bank, but this will be independent of the resale of your vehicle.

Repay your loan then change your car: the best solution!

Changing a car while on loan is therefore possible… but risky. If you can't pay off your original car loan, it will be difficult for you to get new credit for a new car. You risk being over-indebted and viewed as a poor customer.

Paying off your entire loan and selling your car before buying a new one means you don't have to accumulate credits and don't have to face high monthly payments. It is a safer option.

Changing a car being leased with LOA

You wish to purchase a vehicle and have opted for Rental with Purchase Option (LOA). In an LOA contract, you can buy the vehicle at the end of the contract. If for any reason you wish to change your vehicle, you have two options:

Carry out a third party termination: settle the credit by repaying the entire amount payable to the financing organization for the period defined by the contract. After that, the holder of the car can either resell the vehicle (if the contract defined with the funding body allows him), or return the vehicle to the owner agency. Make a leasing transfer: this solution is the most profitable and the cheapest for the holder of the car. This involves transferring the leasing contract from one holder to another. The new holder then takes over a contract that has already been negotiated and for a shorter leasing period (the duration of the contract still to be completed).

It is not possible to terminate a leasing contract without paying the rents due and the monthly payments. The leasing contract is inflexible and does not adapt easily to the vagaries of life.

If you want to sell your car, whether your car is under an LOA leasing contract or linked to a car loan contract, we can help you! We take care of all the administrative part for you. Don't hesitate, trust Kyump / CapCar and sell with confidence.

Sell my car in LOA

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