Will a Car Dealer Settle my Finance?

Are you in a car finance agreement, but you’re now ready for a new car? Then you might be wondering what your options are to settle early. It may be that you don’t have the funds to pay off the remainder of your finance agreement – so does that mean you’re stuck? Not necessarily. There are many options to help you move on from your current car finance agreement, including getting a car dealer to settle your finance for you.

You can read our guide on how to sell a car on finance for more information and alternative options if you don’t want to use a dealer.

If you’re looking for a new car, do not let bad credit history stop you from getting car finance for the vehicle you want. GetCarFinanceHere has a fantastic acceptance rate and can provide bad credit car finance. Find the best car finance deals for you with our user-friendly online car finance calculator.

Can I settle my car finance early through a car dealer?

It is possible to change your current vehicle, despite having outstanding finance on the car. One option is with a car dealer, and the process can be quite simple.

You’ll first need to request a settlement figure from your current dealership or car finance company. If you are in positive equity – that is, the amount you owe on the car is less than the car is worth, you can use then go to your new car dealer with the amount. They will use the difference in price between the settlement figure and the cost of the new car to put towards the deposit. The process acts similarly to a part-exchange.

If you are currently in negative equity and the car is worth less than the finance you owe on the vehicle, this does not mean that a deal cannot be struck. You may just need to provide a cash deposit to make up the difference.

What is a car finance settlement figure?

A settlement figure is the amount you need to pay to settle the outstanding balance on your car finance agreement. This includes any remaining payments, fees, and charges.  

Bear in mind, that many lenders have an early settlement fee as part of their agreement, so the amount you have to pay might not merely be the remaining loan and interest. An early settlement fee will typically be around 1% of the outstanding loan amount, or 0.5% of the total loan amount, if there are less than 12 months remaining to be paid.

How to get a car finance settlement figure?

You can request a settlement figure by writing to your current finance company or dealership. They will provide you with a breakdown of what you need to pay to settle your finance agreement, including the remaining loan amount, interest, and any fees to be paid.

Can I use a car dealer to settle my finance if I’m in negative equity?

If you have negative equity, which means you owe more on the car than it’s worth, you can still use a car dealer to settle your car finance. In this case, you may need to provide a cash deposit to make up the difference.

For example, your car might now be worth £10,000 but you have £12,000 left to pay on the loan. In this case, you’re £2,000 in negative equity. You would need to pay £2,000 to the car dealer who is settling your car finance, or the car dealer would just pay the £10,000 and you’d need to pay the car finance company the £2,000 to settle the agreement.

Can a car dealer settle my finance?

Yes, a car dealer can settle your finance. If you want to trade in your current car for a new one, the car dealer can use the difference between the settlement figure and the cost of the new car as a deposit.

How long does it take for a dealer to settle finance?

The time it takes for a dealer to settle finance depends on the finance company and the terms of your agreement. It can take anywhere from a few days to a few weeks for the finance company to process the settlement and release the car’s title.

GetCarFinanceHere is dedicated to offering support and advice throughout the car finance process. Our expert brokers work hard to get the best deal for you and ensure that you fully understand the process and what you are paying for. If you have any questions regarding our car finance deals, get in touch with GetCarFinanceHere. Call us on 0800 042 0204, 01282 544532 or contact us online.