It is possible to accumulate two car loans, provided that the borrowing capacity is sufficient, otherwise it is necessary to resort to a group of car loans.
Accumulate 2 car loans: principle
Several scenarios can lead to the accumulation of two car loans for a household, the first being a wish to change vehicle, although the credit of the first vehicle is still being repaid, it is possible to sell the car and then to subscribe a new loan to buy another, the borrower is therefore left with two outstanding car loans. If the borrowing capacity is above 33%, that does not raise any problem on the other hand, beyond this percentage, it is necessary to remedy a regrouping of the two car loans in only one.
Another scenario is the accumulation of two car loans for the household, linked to two different purchases in order to commute for work for the two adults. This case does not pose any concern, again on condition that the debt ratio is sufficient to accumulate the loans. It is therefore necessary to ensure that the debt remains well below 33% and that the borrower does not find himself in payment difficulties. The combination of the two loans is in no way disturbing as long as the financial stability of the home is not called into question.
Change vehicle with a current loan
If the household already has a loan in the process of repayment and possibly other loans, the accumulation of two car loans can be compromised, it is necessary to avoid ending up with too much indebtedness at the risk of not being able to repay the debts. Rather than accumulating a new credit, it is possible to consolidate existing loans and include the amount of the new credit, this allows you to have a single monthly payment and to be able to finance the purchase of your new car.
This option is also called the repurchase of car credit because the loans in progress are repurchased by the new bank which it will propose a new contract of credit. This operation brings more adaptability in the expenses of the home and very often makes it possible to carry out the vehicle purchase project, without necessarily accumulating two car loans.
Resale of the car and new credit
It is frequent that motorists wish to resell their car while the initial credit is still in progress and that they wish to take out a new loan to buy the new car, this new loan will quite simply make it possible to finance the difference between the resale price of the first vehicle and the purchase price of the second. This operation is feasible provided that the initial car loan authorizes the resale of the car.
Many car loan contracts simply include a prohibited resale clause until the loan is fully repaid. This situation therefore complicates the car change operation, unless the motorist uses a car loan buy-back allowing him to include the desired amount in the operation. Thus, he repays his loan in advance and can buy the new vehicle.