So . . . you're keen on a lease deal.
But you've still got a few months left on your PCP contract, right?
Or maybe you own your current car outright and don't want the hassle of having to sell it. Auto Trader ads don't come cheap . . . and then there's the pain of having to deal with time-wasters and potential tyre-nickers.
So wouldn't it be great if you could just part exchange it and get money off your soon-to-be lease car?
The good news is that it's possible. Here's how.
What Is Part Exchange?
Part exchange is basically when you 'trade in' your old car for money off your new one.
Will LeaseLoco Accept Part Exchange?
Not directly, but once you get in contact with the folks who supply our lease deals, they may be able to organise it for you.
At the end of the day, we're a lease comparison site, not a broker or a dealer. That said, we still want to make it easy for anyone to say goodbye to buying and PCP-ing.
OK, Will They Accept Part Exchange Then?
The bottom line is: it depends on the dealer . . .
Some might not accept vehicles from manufacturers that they don’t work with. For example, you might find it difficult to part exchange a Ford Focus if you want to lease a Mercedes-Benz EQA.
And aside from dealers, only some brokers offer this service. A lot of them don’t have showrooms or customer-facing premises, meaning they can’t offer part-exchange or things like test drives or vehicle servicing.
How Do I Find Out?
Luckily, we've made it super easy for you to get in touch with them, even if it's just providing you with some advice or pointing you in the right direction.
Once you spot a lease deal on our site that you like, it's a simple case of clicking 'Get a quote', and our leasing partners will be happy to discuss part exchanging your car with you.
But remember, there's no guarantees.
And also bear in mind that if your part exchange request is accepted, you'll still have to pass a car lease credit check in order to secure a lease deal. (But your score doesn't have to be perfect, just respectable.)
I’m Currently In a PCP Deal, What Can I Do?
If you’re currently partway through a Personal Contract Purchase (PCP) agreement, you will need to contact the funder to discover your settlement fee, which they will give to you in writing.
From this, you can get a valuation on your current vehicle and find out whether you are in negative equity or have cash to put down. If the valuation is greater than the settlement figure, then this is yours to use in whatever way you want, including for the initial payment on your next lease car.
But it's bad news if the settlement figure is more than what the car is worth . . . because then you'll have to make up the difference in order to exit the PCP deal.
Can I Part Exchange a Car I Lease?
No, because it's not your car to give away.
Remember, leasing (also known as Personal Contract Hire) is essentially like renting. In the vast majority of cases, you won't have the option to own the car outright at the end of the agreement.
Unlike in a traditional PCP or Hire Purchase agreement, you're not financing the purchase of a lease car.
Can I Part Exchange a Car If I Have Outstanding Finance?
This relates to the previous point . . .
And the answer is yes, as long as you don't have negative equity.
If you've built up equity on your current car, then this means that it is worth more than the Guaranteed Future Value (GFV) that you agreed upon with the dealership at the start of your contract. This was calculated based on an educated guess of how much your current car would depreciate over the term of your lease contract.
Bottom line: if your car is worth more than the Guaranteed Future Value, then the dealer can't ask for a larger payment to settle the remaining finance. If you were to trade the car in before paying the balloon payment, you could use this equity towards your new lease car.
What Details Do I Need?
Before getting a valuation of your old car from a provider or broker, ensure that you have the following information to hand:
-
Current mileage
-
Registration number
-
Make and model
-
Your address details (used to check collection availability)
What If I Have Negative Equity On My Old Car?
Even this isn't the end of the world.
A provider might still give you money for your old car. However, they’ll likely build the remaining finance in to your lease deal for the new car. This will have the effect of making the monthly payments for your new vehicle more expensive, so be sure to check that you’re happy with the stated price.
But it does still mean you get to exit your PCP deal early and move on to your awesome new lease car.
(But also check if there is a ‘voluntary termination’ clause in your PCP/Hire Purchase contract, meaning you can exit your agreement if you've paid at least 50% of the payments.)
Will a Part Exchange Make My Monthly Payments Cheaper?
Probably not, but there is a chance.
Whether you opt for a large up-front payment or a higher monthly rental, our lease deals work out at the same price overall. And that'll mostly be true elsewhere, too.
This does mean that there’s not much of an incentive to produce a large initial payment at the start of your term, seeing as how you're just going to end up paying the same.
However, this can depend on the dealer. Meaning there's sometimes money to be saved by opting for a higher initial payment on your new lease vehicle via a part exchange.
One thing it will allow you to do is put more towards the initial payment deposit (if you have one, as we also offer no deposit deals) that's at the start of the lease. Otherwise, you might have struggled to pay for this. After all, it can sometimes be a big chunk of cash, so a weight off your shoulders.
And even if you don't benefit financially from your part exchange, it does still mean you get to ditch your old car sooner.
Summary
Soo … that's the lowdown on part exchange car leasing.
Whether you’re an individual on the hunt for a personal lease or a company on the lookout for a new business lease, it can be a great way to start paying off the cost to lease a new car.
Yes, it can be possible, but it's not guaranteed as it really depends on the individual broker.