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A guide to upgrading your car with your most common questions answered.

9th April 2019

When you look to upgrade your existing car or van there are often all sorts of questions going through your head - let Leasetree help answer them

9th April 2019

It’s not unusual to hear the following questions at Leasetree:

  • What do I do with my existing vehicle?
  • Will they take part-exchange?
  • Will I get a good deal for my old car or van?
  • What do I do with the existing finance?
  • What exactly is voluntary termination and how do I voluntarily terminate my current vehicle?

All these questions can sometimes make the prospect of upgrading to a new car seem very painful but it does not need to be if you have all the information and while everybody’s circumstances will differ slightly, Leasetree looks to answer these and other questions below.

Firstly, What are your options with your current vehicle?

If you own the vehicle outright, you can obviously sell it privately or you can opt to trade the car in to pay for the deposit on the new car or even reduce what you need to pay in deposit or perhaps opt to reduce your monthly payments on the new car or van by putting more deposit into the car or van.

Part Exchange

“Will they take part exchange” is a common question that we get? This all depends on the dealer itself. Leasetree deals with partners that offer this facility when taking out finance or a lease on a new or used vehicle but if you only want just the finance through us then this very much depends on the dealer you choose

. If you just want finance through us, we recommend that you use a dealer that has a very clear process on part exchange. The best ones will have a form that you fill out and when you make an honest appraisal of the vehicle they can give you a quick and accurate indication of what they will give you to part exchange.

It’s important to give a true reflection as it can cause issues when you look to part exchange and the vehicle is not as described. The most common issue is getting less for your old car than you thought at the time of exchange and having to cover the difference or re-do the paperwork. Obviously, if you go into a dealership and ask for a part exchange then the car assessor or salesman will appraise the car there and then but be careful that they do not use the old car part exchange to justify not giving you a great deal on the new car! Buyer beware! Not all dealers are as proven as Leasetree’s partners.

Dodgy Dealers

While we are on the subject of dodgy dealers, if you don’t buy your car though a reputable dealer of a site like Leasetree then you would do well to consider the information on the site before parting with your hard earned money on a car or van!

Existing Finance

If your car or van still has existing finance on it then you will need to let this run its course of settle the finance depending on the type of finance you have on your existing deal. With Hire Purchase (HP) or a Conditional Sale (CS) agreement, it’s generally pretty straight forward – simply call the finance company and ask for the settlement figure and they are obliged to give the settlement figure to you.

Our partners can often settle the finance on your behalf in this case and you can also part exchange your car so that it’s possible not have to make any payment directly to the old finance provider yourself.

If you have a Personal Contract Plan (PCP) the process is less straightforward in that – while you can settle- it’s  unusual to have much equity in the vehicle until your agreed term is nearly over, which means you may well have to pay in to end the agreement early. The important thing with PCP is getting your timing right and taking out a deal in the first place which will reflect when you might tire of the car.

Tired of your Car?

The main point here is that if your original car was on a 5 year HP deal if you tire of the car after say 3 years its relatively easy to settle but if you are on say a 4 year PCP deal and you are bored with your car after 2 years you are going to have to pay a premium to get out of the deal. What’s the solution? On HP consider longer terms and on PCP think about shorter 2 or 3 year deals if you think you might tire of the car.

Personal Contract Hire deals

With Personal Contract Hire deals, your options are further restricted and an early ending of the agreement will come with significant fees and its highly unlikely to be a good option for you.

Voluntary termination

 Another question we often get is: What is Voluntary Termination, how does it work and do I qualify for VT?

Voluntary Termination is often a viable way for you to legally end your financial relationship with a lender provided you have entered into a PCP (Personal Contract Plan) or an HP (Hire Purchase) agreement but voluntary termination rights do not cover PCH (Personal Contract Hire) or operating lease deals. The right relates to legislation within the Consumer Credit Act 1974, Section 99.

This legal right means that you are entitled to apply voluntary termination of car finance without further implications provided you have paid, or will pay, 50{ce1f5a97386adb343f3d9b12b92f2c65f76aa8e98ead3145386a848fb9911aa8} of the total amount payable on your PCP or HP deal. You need to include interest and fees in this amount and you cannot have missed any payments (as you then lose your Voluntary Termination rights). There also needs to be no damage beyond “normal wear and tear” (normally supplied up front by your finance or lease company) and that you have taken “reasonable” care of the vehicle if you want to end the car finance agreement under this clause.

The Total Amount Payable (TAP) and the termination amount can be found in your car finance agreement and you must pay off 50{ce1f5a97386adb343f3d9b12b92f2c65f76aa8e98ead3145386a848fb9911aa8} of TAP to end the finance agreement.

If you have a  PCP agreement, the TAP will also include the Guaranteed Minimum Future Value (sometimes known as the “balloon payment”).

Please note that Voluntary Termination (VT), is very different from Voluntary Surrender (VS) where Voluntary Surrender means that you give back the car but still owe any outstanding money under the original terms. Voluntary Surrender is basically a last resort and even then is very rarely the best option.

You should also note that if you have not paid off 50{ce1f5a97386adb343f3d9b12b92f2c65f76aa8e98ead3145386a848fb9911aa8} of the car or van, you can still apply your Voluntary Termination rights if you have HP or Conditional Sale but you must make good to the 50{ce1f5a97386adb343f3d9b12b92f2c65f76aa8e98ead3145386a848fb9911aa8} mark so you will need to pay in to get out.

Finance companies don’t like Voluntary Terminations at all! VTs cost them money, especially if the mileage on the car is very high. Many finance companies are likely to try and put up barriers for Voluntary Termination but you should simply write to them, quoting the Act and request your legal right to VT. Be wary of “termination packs” which can include clauses that actually prevent you for Voluntarily Terminating.

A key advantage of using Voluntary Termination is that the finance company cannot harm your credit rating if you VT. It can, however, refuse to finance you and if you are a repeat user of Voluntary Termination, don’t be surprised if a finance company that you have “stung” ( from their point of view) may not grant you credit themselves in the future though there will be many others that will happily grant credit as this information cannot held against/ made available to other organisations. In short, its your right to Voluntarily Terminate (VT) in the case of PCP and HP deals.

You don’t have to figure out everything yourself though. Leasetree and our friendly partners have seen pretty much every type of finance deal and every type of vehicle whether in good condition or not.

Leasetree are here to help.

If you want to get out of your current deal but are not sure of the in’s and outs, simply pick a car that interests you, click on the offer and fill out the Get a Quote form giving details of what car you want and what car you want to move on from. Our helpful partner account managers will guide you through the process and your options but remember that we have deals on the following types of vehicles:

Zero Deposit Cars and Vans – why tie up valuable capital?

Hybrid and Electric Cars and Vans – Go Green and join the Alternative Energy Revolution, save money and help save the planet.

Brand New Car Lease Deals – We love the smell of a new car in the morning!

Used Car Lease Deal Bargains – Get a Lease or Finance Deal on a used car on reduced monthly payments.

Prestige Car Lease Deals – If you are after something Special – look no further!

Short Term Lease Deals – More and more of our customers are opting for short term 3, 6, 9 and 12 month lease deals. Change your car or can pretty much whenever suits you following a short term lease.

Business Car and Van Lease Deals – Lease deals that mean Business and deliver the goods!

Poor and Bad Credit Lease and Finance Deals – Don’t let a poor credit file hold you back, LeaseTree have hundreds of poor and bad credit lease deal cars and vans that can be on your driveway in under a week.

Small, Medium and Large Van Lease Deals – a Van for every occasion, new and used.

Or just browse our Special Offers here and see what takes your fancy.

  • Simply select a deal you like, click on it and apply for a lease of finance deal using the quick application form.
  • If you cant see the car or van you need, just fill in the quick “Get a Quote form” advising what car you are after in the comments box and be sure to advise if you want to part exchange at the same time.

Once we know this we can work with you to figure out what you will get for your existing vehicle and how best to get into your new, nearly new or next used car.

  • Alternatively, you can use the contact us form – uses the comments section to ask any question including part exchange ones- and we will come back to you swiftly.

Leasetree – its as easy as 1,2, tree.