Can I Transfer My Car Finance To Another Person?
There are a number of reasons why you may be considering transferring your car finance to somebody else.
It could be you want to sell the car or give it away to a friend or family member. Or maybe you just can’t afford the repayments anymore.💸
Whatever the reason, it’s important to understand whether it’s even possible to transfer the finance over.
In today’s blog, we’ll explore whether you can transfer a car and its finance. You’ll also discover the rules around transferring ownership of a car with outstanding finance.🚗😀
Can you Transfer Car Finance to Another Person?
In most cases, transferring car loans directly to another person isn’t something you can do.
This is because the finance agreement was approved based on your own unique financial circumstances, including your credit rating.
Everyone has a different financial profile and credit history, making a direct transfer complicated.
If someone else wants to take over the car finance, they will typically need to apply for a new finance agreement in their name.
In some cases, lenders may consider transferring the finance, but this still requires the new person to undergo a credit check and approval process.
How to Transfer Car Finance
If transferring car finance is an option with your lender, here's a step-by-step guide on how to do it:
Step 1: Contact the Lender:
Reach out to the lender to discuss the possibility of transferring your car finance. Ensure you understand the terms, conditions, and any fees associated with the transfer process.
It's crucial to get clarity on all aspects of the process, including any potential impact on your credit score or financial liabilities.
Step 2: Credit Check
The new borrower will need to undergo a credit check as part of the lender's assessment process.
This step is vital to determine their ability to take on the finance agreement, ensuring they meet the lender’s eligibility criteria.
Step 3: Approval Process
After the credit check, you’ll need to wait for the lender's decision.
During this time, they will evaluate the other persons credit report to determine if they meet the necessary criteria for the finance transfer.
Step 4: Signing the New Agreement
If approved, both the original and new borrower will need to sign the required documents to formalise the transfer.
This step legally binds the new borrower to the terms of the car finance agreement, transferring all responsibilities and rights under the contract.
Considerations Before Initiating a Car Finance Transfer
Before initiating a car finance transfer, consider the following:
The Eligibility of the New Borrower: Assess the financial stability of the person you want to transfer the finance to.
Their ability to take over the payments is critical in getting accepted.
Early Settlement Fees: Be aware of any fees for settling your finance early. These can add to the cost of the transfer.
You can use our handy calculator for early settlement to determine how much it will cost.
The Lenders Transfer Policy: Not all lenders let you transfer your car finance over. It's essential to check the specific policies of your lender.
Impact on Credit Scores: Consider how the transfer may affect both your and the new borrower's credit scores.
Remaining Loan Term: The time left on the current agreement can affect the likelihood of the transfer being accepted.
Vehicle Condition and Value: The current condition and value of the car should be factored into the transfer decision.
Each of these considerations plays a crucial role in the transfer process.
If you're considering settling your agreement early, always contact the lender first.
If you’re looking to transfer because you’re finding the repayments difficult to manage, there may be other options available.
For example, it may be a better option to refinance your agreement.
By refinancing with a lender like Carmoola, it could significantly lower your monthly repayments.😎💸
Read more about transferring car finance:
FAQs About Transferring Car Finance to Another Person:
What documents are required for vehicle transfer?
To transfer vehicle finance, you'll need the original agreement, valid identification, and documentation for the new borrower.
How can I transfer the ownership of a car with outstanding finance?
To transfer ownership of a car with outstanding finance, you can settle the remaining balance. There’s also the option to arrange for the new owner to refinance the vehicle under their name.
Is it a long process to transfer car finance?
The length of the process to transfer car finance can vary. It depends on the lender's specific procedures and how quickly all the necessary documentation is provided and processed.