Can I transfer my car finance?
Wondering whether you can move your car finance to someone else or another car? Lots of people have questions about this process, so we’ve answered your common FAQs.
Can I transfer my car finance?
Unfortunately, every car loan is tailored to the vehicle you’ve financed, so you can’t just transfer a car loan from one car to another. Nor can you transfer it to another person.
But that doesn’t mean you’re stuck with a car you no longer want or can’t afford. You do have options, even if you haven’t yet reached the end of your agreement. You could:
Pay the settlement figure – to settle your car finance early, contact your lender to find out how much you’ll need to pay, including fees and interest.
Opt for voluntary termination – if you’ve paid 50% of the total amount payable (including fees, interest, and the balloon payment in a PCP), you can simply hand the car back.
Refinance your car – you could apply for a new finance deal (usually with a new lender) to reduce your monthly payments or use any positive equity in your car as a deposit in a new agreement.
The best option for you depends on your circumstances and why you want to transfer. Get in touch with us if you’re not sure and we’ll help you work out the best course of action.
Can you transfer car finance to another person?
No, for the same reasons, you can’t transfer an existing car finance agreement to someone else. Lenders assess each applicant individually, considering factors such as credit history and financial stability. For this reason, finance can’t be transferred.
However, you do have options for ending your contract.
If you want to sell the car, you’ll need to settle your finance first. You can request a settlement figure from your lender at any time. This is the amount you need to pay to end your agreement early and own the car.
Or, if you want to hand the car back, you may be able to opt for voluntary termination. But you have to have already paid more than half of your total amount owed (including fees and interest).
Can you swap names on car finance?
No, you can’t swap names on car finance. Every loan is tailored to the borrower’s unique circumstances. And because someone else’s circumstances won’t be exactly the same, they can’t be easily transferred.
If you’d like to buy a car that someone owns on finance, they’ll need to settle the finance first to buy the car outright. You can then apply for a loan in your own name.
If I can’t transfer my car finance, what options do I have?
If you’re having trouble making your repayments or someone else wants to buy your car, there are other options you can explore. Let’s look at these in more detail.
Pay the settlement figure
If your contract allows, you could end your contract and pay the settlement figure. This is the amount you need to pay to end your agreement early, and you’ll own the car at the end. The further you are into the agreement, the lower your settlement figure will be (but early repayment fees might apply).
Opt for voluntary termination
If you have paid 50% of the total amount payable on your agreement, then you have the right to voluntarily terminate your PCP or HP loan and hand the vehicle back. The amount payable includes any fees, interest, and the balloon payment in a PCP deal.
Refinance your car
You could also apply for a new finance deal (usually with a new lender). This is when you take out a new agreement to settle your existing loan and swap to a loan with cheaper monthly repayments and a longer repayment period.
Can I change my car before the end of my finance agreement?
Every car finance agreement is tailored to a specific vehicle. So, unfortunately, you can't simply change your car during your loan. However, if you want to switch to a different car, you could settle your existing finance agreement first.
This might involve paying off the remaining balance on your current car loan (your settlement figure). Or, if you can’t pay that in one go, refinancing might be the best option for you.
Why can’t you transfer car finance to another car?
You can't transfer car finance to another car because the finance agreement is tied to the specific vehicle you choose.
Lenders base their decisions on factors such as the vehicle's value, condition, and depreciation rate. So, moving the finance to another car would need a reassessment of these factors. This might not always be possible or practical.