Taking out a new car loan to change vehicles is not an easy operation: certain important aspects must be taken into account
The main advantage that comes from change in car financing it’s just in the nature of the operation. The owner can choose a vehicle that best suits your needs, which can change over time. Or simply the same model, but updated in its specifications. Whatever the reason, it remains to be seen whether it is permissible to change vehicles in case the car loan is not extinguished.
CAN I CHANGE VEHICLE IF I HAVE ACTIVE AUTOMOTIVE FINANCING?
In the financial field, the disbursement of a loan does not generally represent an obstacle to obtaining additional financing. Also in the context of car loan to change vehicle. Generally, automobile contracts provide for the possibility of replace the financed vehicle with a new or used one of equal value. But you need to check them carefully contract terms to check for any limitations or restrictions. In the event of replacement of the vehicle, it may be necessary to renegotiate the loan with the bank or finance company, depending on the conditions signed. Funding options are numerous and should be assessed based on the needs of the applicant. The choice of a suitable option solution requires a precise assessment of the conditions offered by the various financial institutions in order to identify the most advantageous offer in terms of interest rate, loan duration and fees applied. Dealerships generally activate targeted agreements with credit institutions and financial institutions. These are possibilities to be carefully evaluated because they may prove to be interesting. But at the same time, it is not at all so obvious that they are the cheapest options on the market.
CAN I ACCESS NEW CAR FINANCING IF I ALREADY HAVE ONE ASSET?
In general, the decision whether or not to grant a new car loan to buy another vehicle is linked to the internal policies of the bank or financial company. But of course also applicant risk profile. The credit institution assesses:
- the repayment capacity of the applicant;
- his income;
- your credit history;
- your current financial situation;
- other relevant information.
If the applicant already has an outstanding loan, the bank or lender may consider the risk higher. In particular, if the candidate does not have solid experience repayment capacity or is unable to demonstrate the possibility of repaying two loans simultaneously, the lender may decide not to grant the second loan. Too many concurrent loans can negatively impact an applicant’s credit score. The bank may feel that the taxpayer is trying to acquire too much credit at once and deem them less reliable as a result.
WITH AN UNEXPIRED CAR CREDIT, CAN I SELL THE VEHICLE?
According to the legislation in force, it is possible to sell a vehicle even if the corresponding car loan has not been extinguished. THE car loan agreement it exclusively concerns the relationship between the holder and the lender or the bank with whom it was signed. When dealer or other reseller he has sold the car, has already received the full amount and no longer has any rights to the vehicle. Therefore, once the car is purchased through a loan, the owner has the full right to dispose of it as he sees fit, whether the the car loan is active or less. This choice can relate to the sale of the vehicle, the scrapping or any other destination.
THE OBLIGATION TO PAY CAR FINANCING COSTS
In any case, the obligation to pay the monthly car loan payments it also remains in case the vehicle is destroyed in an accident and becomes unusable. There selling a car with the financing there can be different alternative solutions to the simple continuation of the payment of the installments. The seller can decide to sell the residual part of the loan to the buyer of the car, lowering the sale price, with the consequence that the latter will have to pay the residual installments. This operation requires the explicit consent of the buyer and the finance company, which verifies the solvency of the incoming subject. Alternatively, the seller may use the proceeds from the vehicle sale repay the loan early, reducing the overall interest cost.
Source : Sicur Auto