How to find out if your car has got negative equity

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Changing cars on finance is not always easy. Whilst lots of websites and dealer forecourts show a monthly payment,  they don’t take in to account your trade-in or how much you owe on it. To understanding how much your next car will cost per month at a glance will need a lot of separate calculations and until now has not been available to the public.

This doesn’t just depend on what your part exchange is worth, it can also be based on your credit score rating. If you’re a low to medium risk, some companies will offer you their lower APR rates whilst others charge more depending on how well you score.  

‘Mid-term’ or early change finance

In addition to the aforementioned headache, what happens if you fancy a change when you’re in the middle of an existing finance agreement? You’ve been a good payer and just fancy changing your car sooner for something better – so what’s the best way to do it? 

For many, it was difficult to know when was a good time to change – and trying to ask someone at the dealership to work out a deal for every Used Car on display was never going to happen. 

Unless you reach something called ‘equity parity’, it actually may not be advantageous to change. Put simply, if your car has depreciated faster than you’ve been paying it off, then you may have to put an amount of money in just to clear the shortfall – or of course you can carry on with your current monthly payments until you’ve paid more off. The problem there is that your car could also be depreciating just as fast – so, the advice is to keep a track on how the two figures align. 

Equity checker

Using the newly-launched Payment Swap website actually gives you this facility. From July 3rd, finance customers can now find out if it’s a good time to change their car or remain in it at the touch of a button.

Entering three pieces of core information in to is all that’s needed – these are (1) your current monthly payment, (2) vehicle registration number and (3) your postcode. Once in, enter your current mileage, move a slider to select your car’s condition and then tell it how many payments you have left. If your car is on PCP, you can also enter the final payment and that’s it. The system then quickly works out your car’s value – less what you owe. 

If your car has negative equity, a screen shows how much you would need to add in to clear this down and then if you fancy, start your new payments again on a more recent car of your choice – with no additional monthly outlay. 

Swap your car online and collect from the Retailer

If you don’t have negative equity and you’re ‘in front’, the website intuitively takes you to its results page, showing currently a choice of over 12,000 dealer-supplied cars that you can swap to for the same monthly payment with no deposit needed. These include cars from £50 a month running right up to £2,000 per month for the delivery mileage high end Range Rovers.

The days of people buying cars to keep are long gone, whereby more drivers are now in to ‘consuming’ and living in the now. Although you are buying a car online with payment swap, the principal is a lot like taking out a mobile phone contract, where in 12 or 24 months time, you just swap it for the newer model on the same or better tariff.  Naturally customers are not renting with Payment Swap but are encouraged to use the facility to swap more often. 

The equity search facility on Payment Swap is extremely accurate and is free to use. It takes on average 90 seconds to perform and you can do this anonymously as many times as you like. 

If your car does have negative equity and you owe more that it’s worth, by entering your email address you will receive an automatic reminder for when the time to change is right.

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