Can You Part Exchange For A Lease Car?
When you lease a car, you won’t be buying or financing it in a way that would make you the owner. As such, you won’t be able to part exchange any vehicle which you have leased. However, if this is your first time leasing and you have an old car that you want to offset against your new vehicle to make it cheaper, you will have this option available to you.
Read on to find out what your options are when part-exchanging for a lease car.
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Will a part exchange make my monthly payments cheaper?
Unfortunately, no. Unlike when you buy a car or finance it in the traditional sense (e.g. through a loan), leasing is different.
The money a leasing provider offers you for your old car can be used to cover (or partially cover) the initial payment required at the beginning of a lease deal. Because this is the biggest chunk to pay in one sitting for a leased car, this can be a weight off the shoulders which allows you to get rid of an unwanted motor and reduce the upfront cost in one swoop.
Remember: A larger initial payment will mean lower monthly rentals, so you may be able to reduce the lease payments indirectly by matching the money you get for your old car, then using this as the initial fee.
Not all providers and leasing companies will offer a part exchange service, but ones which do may do it for free, as well as throwing in collection too. However, be sure to shop around websites of multiple providers to ensure you get the best offer.
Before getting any valuation of your old car from a provider, ensure you have the following information to hand, as it may be required:
- Registration number
- Current mileage
- Make and model
- Your address details (used to check collection availability)
What if I have negative equity on my old car?
Depending on how you bought your old car, there may still be some outstanding finance that needs taking care of before you can offload it.
If this is the case, a provider might still give you money for your old car. But they’ll likely build the remaining finance in to your lease deal for the new vehicle. This is going to make the monthly payments for your new vehicle more expensive, so be sure to check that you’re happy with the price quoted before signing the contract.
This isn’t an ideal scenario, especially as the idea of a part-exchange is so that you can save money on a new car. So it may be worth checking if there are is a ‘voluntary termination’ available for your old vehicle’s finance, especially if it’s a PCP (Personal Contract Purchase) agreement. In short, this will allow you to hand it back to the finance provider if 50% of the total money for the deal is paid off.
Although this option would be mean you don’t benefit from a reduction on your new car’s initial payment, you’ll still save money on your monthly payments by not depending on the leasing finance provider to settle the outstanding finance.
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3 steps to part exchange for a lease car
As mentioned before, the process is simple and tends to not cost quick for everyone involved. Most of the time you won’t need to pick up the phone for anything other than arranging for collection of your old set of wheels.
Remember: Different providers and online services might offer you a different price on your car, so be sure to shop around and get the best price.
Here are three steps to part-exchanging your car for a lease vehicle.
1. Enter your details
In order to give your car a valuation which accurately reflects its condition and the miles it’s driven, the provider will ask you to provide key details about the vehicle. As we mentioned before, this should include the registration number (which will tell them its age), current mileage (this indicates what condition the car will be in) and the manufacturer and model details (some vehicles lose their value quicker than others).
As well as details about the car, the provider will need some personal details too, such as your address, telephone and email. This will allow them to contact you in order to arrange collection.
Besides just sorting logistics for a part-exchange, the information about your car and how to get hold of you can be useful in helping you find your next new car.
2. Wait for your valuation
There are some providers which specialise in offering a quick turnaround from receiving your details to providing you with a valuation. Look out for ‘fast and free’ when deciding which service to use.
Depending on the processes used by the provider you use, the price quoted for your old car could be sent in an email, text message, or they may even call you in order to make the process of transferring the money (and arranging your new lease deal, if you choose this option) quicker.
Remember: A part-exchange for a lease car doesn’t mean you need to take out a leasing agreement. Some providers state that they can transfer the money for the vehicle directly to your account.
3. Decide whether the price is right
The price you’re quoted for your old motor won’t be the same across all providers, so be sure to try different ones when looking for a price. Pick the one which gives you the most for the car, although you should factor in any fees they may charge for this service.
It may even be worthwhile checking your chosen provider’s latest lease deals in order to get an idea of what lease car you want as part of a part-exchange agreement. This will also give you an idea of what the initial payment will be and how much of this your old model’s valuation will cover if you choose to work it against this.
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For more information about leasing and car finance, head over to our handy guides page.