You may want big aftermarket spoilers, alloy wheels, and other performance upgrades when you wish to update your car. However, modifications can be more subtle than this. If you want to swap standard lights for LED lights or update the music system, your car finance company may take these things as modifications.
Thus, it’s important to know where you stand to update the vehicle and the extent you can do so. The blog helps you understand whether you can modify a car on finance. It also lists what happens if you do so without confirming it from the provider.
What do basic car modifications include?
Modifications change the look and performance of a car. It makes a car different from its original manufacturing. It splits into 4 main categories:
a) Performance-based modifications
Tweaking, adjusting and replacing parts that improve performance are performance-based modifications.
b) Cosmetic modifications
Upgrading, changing and enhancing the exterior and interior appearance. It includes tinted windows and paintwork alterations.
c) Equipment upgrades
It includes adding a tow battery, changing the sound system or installing custom seats, and changing seat covers.
d) Entertainment changes
Updating, replacing and adding information or entertainment hardware.
Is it possible to finance a car on finance?
Modifying a car on a Hire Purchase (HP) and Personal Contract Purchase (PCP) agreement is impossible. Both car agreements require you to pay a balloon payment or a purchase fee before owning the car. Unless you do so, you cannot make any modifications.
Thus, you can’t modify the car without paying the fee and receiving confirmation of the ownership. It is even when you plan to own the car later.
What happens if you finance a car without asking the dealer?
The action a company takes on the car finance agreement depends on the terms. You might find that the company may withdraw your finances immediately. He may ask you to provide or pay the remaining balance within 14 days. If you have a PCP deal, it may mean providing a balloon payment.
Alternatively, the company repossess the vehicle if you modify the car and cannot pay the dues. The car’s actual cost falls in that case, and the provider may ask the borrower to pay the balance within 14 days. In case of a PCP deal, you may need to pay the balloon payment.
Thus, wait until the agreement ends or become the legal owner. Seeking permission from the lender before making potential changes to the car may be ideal. It will help you safeguard the insurance and other costs.
What could be possible obstacles to modifying a car?
When you finance a car, the lender or dealer wants to keep the vehicle according to certain standards. It implies that before making any car modifications, inform and ask your provider. Changing out the tires and adding decals are fine. However, the provider may not immediately agree with performance upgrades, engine changes, entertainment changes and other aggressive modifications.
The car finance providers provide a layout of the modifications allowed. It is also essential to consider that certain modifications may impact the car’s value. It thus becomes difficult to sell or trade it. Therefore, analyse your options carefully before making any modifications. For these reasons, think before making any modifications to your financed car. It will help you understand the potential risks.
Ultimately, if you believe that modifying a car is right for you, ask your car finance provider first. It will help you enjoy the ride without putting yourself at risk of financial trouble.
How do you legally modify a car on finance?
As mentioned above, ask your car finance provider before opting for car upgrades. It will help you avoid additional expenses. Moreover, always check the car update feasibility while checking car finance quotes.
When applying for a no-credit-check car finance agreement, analyse your freedom with the car. It is the best time because the check does not impact your credit history. Thus, try to clear up the maximum doubts regarding the car finance agreement and modifications. If you find it fine, then proceed further.
Here are other ways to update a car on finance legally:
1) Check agreement guidelines in detail
A car loan provider company may have certain restrictions on the developments and changes you can follow with the new car agreement. Analyse the things and updates the company allows on a car.
If you purchase a car on finance for the long term, some companies provide the freedom to update the car to an extent. Thus, check the same apart from the improvements that may impact the value of the car. Try to avoid this mistake at any cost.
2) Identify the impact on car value
As mentioned above, analysing the impact of modification on a car’s value is important. Certain modifications drop the car price and may prove the costliest car finance agreement. What could be worse than paying more because of unheeded modifications? This is because the car finance provider may not get the full car value.
However, you can proceed with car modifications if your provider allows. Identify the total costs and money to update the vehicle. If it’s more than what you expected, check external financial facilities. Despite a bad credit history, you can use it to finance the updates and repairs.
For example, options like urgent loans for bad credit scores may help you finance your needs. It may be ideal if you do not want to delay the repair or it may impact the car’s performance.
3) Identify and update insurance coverage
You may believe it to be the best car update, but your lender may not. It is the reason he may demand additional insurance for modifications. Thus, confirm this with your provider first. It will help you undertake the modifications responsibly.
Bottom line
Modifying a car on finance requires analysing the future requirements, the goals you achieve, the comfort it provides and the impact of the same on car and agreement costs.
Additionally, choose the aspects to modify after researching well. Some upgrades do not go well with the existing module. Thus, it may impact the performance further. Analyse everything from permissions, standards, and upgrades before acting.
Anna Johnson has more than 11 years of experience in direct lending industry of the UK. She is the Senior Content Editor at 24cashflow where she is leading a large team of loan experts. During her career, she has helped the loan aspirants to use the particular loans in the best way and improve their financial lives and status.
Anna Johnson is known for her in-depth research of the UK loan marketplace, as she has worked with many major lending firms in her career. During her educational phase, she has done a research on ‘Finance Fundamentals for Growing Business’.