Can I Change My Car Before I’ve Finished Paying For It?

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There’s no rule that says you can’t upgrade your car before reaching the end of your finance agreement. However, it’s important to try to pay as much of your loan off before upgrading to the newer model and that way, you won’t find yourself in negative equity.

Do you know what Negative Equity is?

Negative equity is when your car has finance outstanding that’s greater than your car’s value. For example, if your car is worth £12,000 but your early settlement figure is £15,000, then you have £3,000 negative equity.

No, you can’t keep paying for a car you no longer own 🙂

Normally, when you sell your car to an online buyer or, privately to someone for cash, you will need to find that £3,000 negative equity to clear the debt before you can release it. Until your last payment including any option to purchase fee is paid, the car legally belongs to your finance company.

How do I know when is the best time to swap?

It can be difficult to know when to change your car plus, when negative equity is still in play. It’s a bit like “where’s that crystal ball when you need it?” however, if you enter your details in to you can see when is the best time to swap for another car.

Getting out of negative equity can be difficult if all you want to do is sell. But trading your car in at a dealership could mean they will lend more on finance to cover some of your negative equity. The great news here at Payment Swap however, because we specialise in adding your PX’s negative equity to your new agreement (you can finance up to 125% of your new car’s screen price) this means that typically, there’s no deposit to pay to drive a newer car for a single, affordable monthly payment.

Let’s look at your options?

1. Settle your loan using your savings

Find the money to pay the difference and pay off the negative equity so you can start afresh on your new car. This may be OK if you’re not needing that money for other essentials.

2. Continue as you are

Stay in your present car for longer until more of your loan is repaid. There are three issues with this. Firstly, whilst you’re paying your payments to remain in your car, it’s very likely that your car is depreciating each month at the same rate and can mean it will take even longer before you are in equity. The second issue here is that your car is getting older and is more likely the older it gets to run into reliability issues through additional wear and tear. The third scenario is more of an emotional one – and that is you’re just bored with your car and you want to be driving the newer model with more equipment and improved economy.

3. Mid-term finance

Or you can add your present negative equity to your new agreement. Subject to status, some companies let you add your negative equity subject to status to your new payment. The maximum on a new loan should be no greater than 125% of loan to value. This is usually only available to buyers with a good finance track record.

Avoiding negative equity

Here are the best ways to minimise the risk or negative equity on your future purchases:

  • Keep your vehicle for at least 50% of the period of your loan. So, if you take out a 60 months agreement, plan to keep your next car for around 30 months.
  • The higher your deposit or part exchange equity is next time, the chances of avoiding negative equity when you come to change is far less.
Keep your mileage as low as possible for the highest resale value
  • Try to keep your yearly mileage as low as you can. Higher mileage cars depreciate faster than lower mileage cars. A good low mileage car will have a higher resale value and should cost less to maintain.
  • Change your car before the MOT is due. This is when you may need to actually spend money on your car just to have a valid MOT certificate. You can check your car’s MOT expiry date at

How do I change my car with negative equity?

Enter your registration number in to the homepage and follow the quick and easy steps in front of you. As long as you now how much you owe on your old car (your part exchange (PX)) and how much you wish to pay per month, you can actually purchase a car in less time than it takes to watch Eastenders.

The Payment Swap website will work out what equity or negative equity you have and show you a large range of cars that you can swap your car to. The payment seen on each car displayed includes the dealer settling your finance off for you within the deal.

10 easy steps to taking a Payment Swap…

Here’s how easy it is to upgrade your car online and drive something you really want…

1 – Add your reg number and how much you would like for your part exchange

2 – Enter your current monthly payment (so we can match you to similar cars)

3 – Add how much you owe (you can get your settlement from your finance company)

4 – Type your first name (so we can address you properly)

5 – Provide your email address (so we can let you log in to your saved pages)

6 – Search thousands of cars, fine tune your search and to match what you wish to pay

7 – Use the filters to fine tune your search and pick the car you like

8 – Receive your guaranteed part exchange from us

9 – Complete your online finance proposal (soft search)

10 – Pay your £99 Admin Fee and watch the process start (you’ll be kept informed all way through)

At we believe in transparent pricing and clear instructions on what to do and what product you’re buying. This is why we score 4.8/5 stars on

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