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Can I Transfer My Car Finance To Another Car?

Had a change of heart? Found a better ride? If you're still paying off your loan but want to change cars -can you do this?  🤔 There are a number of reasons why you might want or need to make this change. However, with a loan still outstanding, the most important question to ask first is can car finance be transferred to another car?

What you need to know first is that it’s not possible to just remove the car you have from the agreement you’ve made with the car finance company and replace it with a different one. But don’t lose hope because there are several ways that you can end the current car finance contract you have, so you can get a new one for the next car. 

Why Can’t I Switch Car Finance to New Car?

The thought of transferring your car finance deal to another vehicle may seem like a simple idea. But in reality, it’s not that simple. In fact, it’s just not possible.

There are several reasons why it’s just not going to work.

When you applied for car financing, so many factors were considered by your lender. Some of these factors include your financial situation, the car’s value at the dealership at and at different points during the repayment period, and the car financing offers and discounts given to you at the time of your application. 

With all these pieces of information, the loan to be offered to you is assessed by the car finance company. This process includes evaluation and consideration of all the important details that you’ve submitted and other essential information. The lender then decides on whether to offer you car financing or not. If they do, then they also determine the interest rate they’ll offer you with the car loan financing

So you can imagine all the details that the lender had to assess to give you a loan, and any changes to these pieces of information greatly affect their decision. Therefore, changing the vehicle would mean the lender has to repeat the process and evaluate this new set of information. 

If the car finance company could simply change the contract they have with you so you can get a new car, it would be too risky for them. And as a financial institution, they’re not going to put their business at more risk. Keep in mind that lenders weigh up the risks involved for every loan that they grant. 

What Options Do I Have?

Hopefully, it’s now clear why transferring your car finance to another car is just not possible. So, what if you want to upgrade or downgrade your car before the end of your car finance contract? Actually, car finance companies can accommodate your request if you want to change cars. However, the options may or may not be applicable to you, depending on your particular situation. 

Firstly, you need to be sure that you want to change cars. Second, look into the available choices you have. You’re doing that right now by reading this article. Generally, it’s possible for you to take the car you have to a car dealership and then let them take care of it. Another option is for you to settle your outstanding balance on your car finance loan so you can enter another contract.

Let the Dealership Do the Work

Financing companies and car dealerships often work closely with one another. Their sales managers have a deep understanding of the various financial situations that car owners may have. They will be able to help you when it comes to finding a solution, most especially if that means they get to sell another vehicle. 

Going to a car dealership will make things easy for you. However, what you have to be ready for is the fact that you’ll be faced with limitations. The car choices will be limited to what the car dealership can offer. Also, you’ll have to stick with a car finance company that the dealership works with. 

What happens next is that the car dealership will ask the lender what the settlement amount is on your behalf. They will then draft a deal where the car finance agreement can be paid off and then you can start a new contract. 

The dealership will be comparing your car’s value to your outstanding balance. If your balance is less than the car’s value, then the equity in the vehicle can be used as your deposit for the next one. But if it’s the other way around and you owe more than what the car is worth, then you may need to pay the balance so an upgrade can be possible. 

The dealership will provide the simplest and most straightforward agreement so that you can all get what you want. They will pay your car finance balance, then set up a new contract, and then work out any deposit if it’s necessary in your case. 


If you don’t want to go to a car dealership for this process, you may also do it yourself. However, be prepared to do the leg work. The advantage here is that you are free to choose the next car you want and the car finance company that you’ll enter an agreement with. 

Keep in mind that you can’t sell the current vehicle when you still have an outstanding balance with the lender. You need to pay off the amount before you can sell the car. You may, however, arrange the process of selling the vehicle so that you’ll be able to pay the lender immediately once the money from the sale has been paid to you. 

When you’re unsure about something, don’t hesitate to talk to your car finance company. They’ll be able to help you on how you can do this properly so that you, the lender, and the car buyer will all be protected. 

If you need more car finance tips, feel free to check other articles on our blog! For car finance deals that Carmoola offers, simply click here. And for any questions you may have about car finance, reach out! We’ll be glad to talk to you! 👍

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