When thinking about the deposit for your lease car, you might want to consider using your current car.
It’s understandable why this would be an attractive option. And one of the questions we get asked a lot at OSV is ‘can I use my current car as a deposit for my lease car?’
The answer is yes, you can. Most of the time. There are some exceptions. In this article, we’ll be looking at whether you can use your current car as a deposit, and how exactly to go about doing it.
Can I use my current car as a deposit for a lease car?
Yes, you can. You can do this either by part-exchanging your car through your broker or dealership. Alternatively, you can do this through websites such as webuyanycar, or through a private buying website such as Autotrader.
When selling through a broker or a dealer you can either use the full amount as a deposit or you can use some of it, and get the remainder in cash.
What are the advantages of using my current car as a deposit?
There are some advantages to using your current car as a deposit. Some of these include;
- It’s easier
- You don’t have to worry about the disposal of your old car.
- You don’t have to worry about finding money for a deposit
- If you’re using your car as a deposit, you don’t have to worry about finding that money. Deposits can be pricey, so using your car to pay for that means you can spend the money you were originally going to use on something else.
What are the disadvantages of using my current car as a deposit?
However, there will be some disadvantages. For example;
- You might only get trade value for it
- Depending on who you go through you might only get trade value. This means that you may end up getting less than you originally thought for the car.
- Not all brokers offer this service
- This only applies if you go through a broker obviously. But, it’s best to check as not all of them offer this.
Broker Vs. Dealership Vs. Online: Which is best for selling my car?
Now that we’ve looked at the pros and cons of using your car for a deposit, you might be asking, “where’s the best place for me to sell my car?”
As I mentioned earlier, not all brokers offer this service. We do at OSV, but that’s because we think it’s easier. Not only is it easier for us to process everything in one go, it’s also so much easier for the customer. They don’t have to worry about selling their car.
However, as not all brokers offer this service, if this is something you want to do, you need to check. Otherwise you could end up having to sell it yourself – which might not be what you want.
All dealerships offer this service, however. The only problem with this is that the chances are they don’t take brands other than their own. So if you want to part-exchange your Audi to pay for a BMW, your dealer will probably take it, but only to sell it onto another trader in the hopes of making a profit. There are exceptions, though. Some dealerships have buyers that will buy different brands. Generally, though, they won’t.
Your third option is going online. This can be done on two types of websites. It’s a common misconception that websites such as webuyanycar are a bit rubbish. But, that’s not always the case. These types of websites work on trade prices, which is why their prices can seem a bit…disappointing.
However, generally they are pretty accurate in terms of how much your car would go for a trade price. So, even if you don’t sell your car through them, they are a good reference point. A disadvantage of going through a website such as webuyanycar is that there could be a chance of them knocking the price down.
There are also websites such as Autotrader. This is where you can sell your car privately. An advantage of this is that you might get more for your car. Sometimes the difference in price can be significant. Also, there is always room for negotiation. A disadvantage of doing this privately is that it’s a bit more hassle for you. It’s not as simple as a part-exchange. But, the choice is yours.
What are the risks of using my current car as a deposit on a lease car?
There are very few risks of using your current car as a deposit.
The only risk is that the price will be knocked down when the buyer sees the car. And this will only happen if you are not honest about the description of the car. If you don’t give the full description, scratches ‘n’ all, then you could end up with less for your car than originally planned.
However, a reputable broker should ask for photos of the car, including any damage, to ensure they give you the most accurate quote possible.
What happens when I want to use my current car as a deposit?
You’ve decided you want to use your current car as a deposit- what now?
We’re only talking about what happens with OSV because, naturally, we don’t actually know what happens with other brokers. However, we imagine it’s more or less the same.
We would arrange collection and delivery around you. Usually we would collect the car the day before your new car is due for delivery. Your deposit is taken out of your account between the day of delivery and ten days after. And we will pay for the car when we pick it up. So people tend to prefer the car to be picked up the day before so if the deposit is taken out the following day, the money is there.
However, if you cannot be without a car, then we can pick up the car on the day of delivery. We can also arrange for the collection and the delivery to take place in the same location such as your office, for example.
Can I still use my car as a deposit if I owe money on the car?
If you owe money on your existing car, then you can still use use it as a deposit. But, you have to get a settlement figure from the finance house. This has to be in writing, by the way. Once you have this you can ask your broker or dealer to value the car. Any amount over the settlement figure can be used as part or all of the deposit for your next vehicle.
However, if you want to sell your car privately, then you need to clear the finance off before you sell it. You are not allowed to sell it privately if there is still finance left to pay.
So yes you can use your current car as a deposit. Of course, there are some exceptions, and it does have its disadvantages. However, it’s perfect for those who don’t want to deal with the hassle of having to sell their old car on or have to find the money for a deposit.
- Should I use a Car Broker? - 14th August 2018
- What are hydrogen fuel cars? Are they are real possibility? - 22nd January 2018
- Six secrets to know when renting a car - 19th January 2018