Are you repaying a loan and want to change your car? Here are the possible steps depending on the credit agreement you have.
It is possible to change vehicles when you have a consumer loan in progress, that is to say, that the driver has used a car loan to buy his new or used vehicle, and he wishes to change the car while the loan is not repaid in full. There are several scenarios to consider:
- Resell the car and continue to repay the car loan
- Resell the car and pay off the credit (as part of a clause with an assigned loan)
- Resell the car and make a credit repurchase
Resell the car and continue to repay the car loan
The first solution is to proceed with the sale of the car, the driver is the owner of the vehicle, he can therefore legitimately part with it to buy another, for different reasons: enlargement of the family, new model. In this case figure, he can proceed to the sale of the car and buy another with the sum of the resale and a possible contribution. On the credit side, he continues to reimburse the amount by paying the monthly payments due.
This option is only possible within the framework of a personal loan (without allocation) and within the framework of an assigned auto credit specifying the possibility of reselling the vehicle without repaying the credit in advance.
Resell the car and pay off the credit
The driver can also resell the car and proceed to the early repayment of the credit, which is to say that the sum resulting from the resale will be used to repay the credit before its term. If the sum is not sufficient, it will be necessary to add the difference to settle this loan in full. You also have to take into account the prepayment penalties, that is to say, that settling a loan can incur costs for repayment before the scheduled term.
The personal loan does not oblige to repay the credit in advance, on the other hand, this obligation can be present within the framework of a car loan affected (see the conditions of the contract), which leaves little choice motorist than to repay the loan in full at the time of the sale of the car.
Resell the car and make a credit repurchase
The motorist can decide to change his car, that is to say to resell the current vehicle to buy another and request a credit repurchase allowing to redeem the initial loan of the vehicle and to include an amount being intended with the purchase of the new vehicle, the sum of the resale may be deducted from the amount necessary for the purchase of the new vehicle or used for other projects. The use of credit consolidation can be done after the resale of the vehicle or before, depending on the needs of the motorist. Namely, that one can redeem a personal loan as an assigned car loan.