When you buy a vehicle, you can use a loan. Thus, you will finance the vehicle monthly and its price will be flattened. If you want to change your vehicle or resell your vehicle while in credit, this is also possible!
When purchasing a vehicle, the owner may have taken out two different loans.
The affected car loan is a loan made from a bank and related to the purchase of the vehicle. The advantage of auto credit is that it provides a vehicle quickly. It is often used when buying from a professional (dealer). The monthly payments of the car loan are fixed and are accompanied by interest to be repaid over several years. The entire amount of the vehicle can be paid via car credit.
In the case of subscription with this contract, it is necessary to pay attention to the clauses mentioned in the contract in order to know if this one authorizers or not the resale of the vehicle. In some cases, it is possible to reimburse all the monthly payments at once while in other cases, this entails an additional penalty.
The resale of the vehicle may be authorized under certain conditions (such as the reimbursement of all monthly payments inherent in the purchase of the vehicle).
Personal car loan
This loan is often chosen in the case of car sales between individuals. The contract is much more flexible because it is in no way linked to the purchase or possession of the vehicle.
So, if you opted for a personal loan when buying your vehicle, it will be much easier to resell your car afterwards. Obviously, your loan will have to be reimbursed to the bank, but this will be independent of the resale of your vehicle.
Pay off your loan then change your car: the best solution!
Changing cars during a loan is therefore possible … but risky. If you cannot repay your original car loan, it will be difficult for you to take out a new loan for a new car. You risk being over-indebted and considered to be a poor credit customer.
Paying off all of your credit and reselling your car before buying a new one allows you not to accumulate the credits and not having to face high monthly payments. It is a safer option.
Changing cars during leasing with LOA
You wish to acquire a vehicle and have opted for Rental with Option to Purchase (LOA). In an LOA contract, you can buy the vehicle at the end of the contract. If for any reason you want to change vehicles, you have two options:
- Terminate to a third party: settle the credit by reimbursing the entire amount to be paid to the funding agency for the period defined by the contract. After that, the holder of the car can either resell the vehicle (if the contract defined with the funding body authorizes it), or return the vehicle to the owner agency.
- Make a lease transfer: this solution is the most profitable and the least expensive for the owner of the car. This involves transferring the leasing contract from one holder to another. The new holder then takes over an already negotiated contract and for a shorter leasing period (the duration of the contract remaining to be effected).
It is not possible to end a leasing contract without paying the rents due and the monthly payments. The leasing contract is not very flexible and adapts only with difficulty to the vagaries of life.