Back To Front

The term "back to front" in the motor industry refers to the situation where you owe more money on your old vehicle that it would cost to buy a new one. So many people find themselves in a situation where they purchase a new vehicle far too early and end up engaging in buying a new one before making sure that the old one is worth what they think it is!

In some cases dealers will offer to pay off your outstanding vehicle loan but remember that it will be YOU who is ultimately paying it off. When a dealer is offering to do this, don't think that they are doing you a favour. Infact, they are doing the opposite.

What you will find is that when your loan is refinanced, the amount that was outstanding on your old vehicle has been paid off, but as a result, you are paying additional interest on that amount ON TOP of your new loan. This can be crippling, so make sure that you know what your loan repayments are, as well as the amount that you are repaying for the credit on the loan and for clearing the outstanding amount on your old motor loan.

According to some leading car finance companies, the amount of consumers who owe more money on their vehicle than the cost of a new one amounts of almost forty percent. The actual amount tends to be in the three thousand to four thousand pounds area on average which is not an insignificant sum by any means.

You can help yourself further by making sure that the amount that you owe on the vehicle is repayed before buying a new vehicle. This may not always be the easiest thing to do, especially if your family has suddenly got bigger and you need an SUV or similar, straight away. You can also sell your current vehicle privately instead of doing a trade-in with the local car dealership, but then you may also have to wait until the vehicle is sold.

Where possible though, do try and pay back as much as you can that is outstanding on your current motor loan before buying a new vehicle, your repayments will be that much lower because of it.