Can You Part Exchange a Car on Finance?
Yes. A car with outstanding finance can be part exchanged, and it happens every day. The finance is settled as part of the deal, any equity in the car becomes your deposit on the next one, and if the car is worth less than the settlement, that can be handled too. Hero arranges the whole thing in one transaction, with hundreds of cars in stock to part exchange into.
How part exchanging a financed car works
- Your current car is valued.
- Your settlement figure, the amount needed to clear the existing finance today, is obtained from your current lender. Requesting it is free and commits you to nothing.
- Value minus settlement is your position. Higher value than settlement means equity. Lower means negative equity.
- The existing finance is settled directly with your current lender as part of the deal. You do not handle that payment.
- Any equity goes into the new agreement as your deposit, and the new agreement covers the rest.
- One visit, one transaction, one monthly payment at the end of it. The old agreement is closed properly on your credit file, and the car you drive away in is financed on its own clean agreement.
Equity: the deposit you already own
If your car is worth more than its settlement figure, the difference is equity, and equity is a deposit. A car worth £8,000 with a £6,000 settlement carries £2,000 of deposit you already own. For buyers without savings this is the difference between a no deposit application and a with-deposit application, which usually means a lower monthly payment and often a better rate, without saving a penny. If you own your current car outright, the entire value is your deposit. That is frequently a bigger deposit than most people would ever put down in cash.
What if the car is worth less than the finance?
That is negative equity, and it does not stop the part exchange. Hero arranges agreements of up to 120% of the new car's value, allowing up to £5,000 of shortfall to be settled and rolled into the new agreement. Your old finance still gets cleared directly with your previous lender, and you still leave with one agreement and one payment.
Part exchanging into Hero stock
Part exchange at Hero feeds straight into hundreds of cars in stock at Oakwood Motor Company group across the Bury and Chorley showrooms, with delivery available nationwide. That matters for two reasons. First, the valuation, the settlement, the new finance, and the new car all happen in one place, with the same team, rather than being stitched together across a finance company and a separate dealership. Second, every car in the stock is owned and prepared by Oakwood, and AA inspected before handover, so what you exchange into is a known quantity. It works with any credit profile. Hero's panel includes lenders who specialise in bad credit, and a part exchange with equity strengthens exactly the applications that need it most.
Getting the most from your part exchange
- Request your settlement figure before you start. Knowing your position turns the conversation from hopeful to informed.
- Settlement figures are typically valid for a set period, so time the request close to the deal.
- Have the paperwork ready: V5C, service history, MOT certificate, and both keys all support the valuation.
- Be straight about the car's condition. The valuation that survives inspection is the one that was honest on day one.
Frequently asked questions
Yes, both. On HP the settlement clears the remaining balance. On PCP the settlement includes the balloon, and if the car is worth more than that combined figure, the difference is equity toward your next car. PCP cars often carry equity at the end of the term for exactly this reason.
Hero settles it directly with your current lender as part of the transaction. You do not make the payment yourself, and the agreement is closed properly on your credit file.
Usually, yes. Up to £5,000 of shortfall can be rolled into the new agreement, within 120% of the new car's value. Negative equity car finance explains how and what to consider first.
Yes, and often better than a straight application, because any equity in your car acts as a deposit, and a deposit strengthens a bad credit application more than almost anything else. The eligibility check uses a soft search, so finding out costs your credit file nothing.
Find out what your car is worth toward your next one
Start with the soft search eligibility check, no impact on your credit score, and bring your current car into the conversation. Between its value and the stock to choose from, the next car may be closer than the bank balance suggests.
See what you can afford