Positive equity and part-exchange
Positive equity means the vehicle value is above the amount needed to settle the finance — but the numbers need to be current.
For a simple comparison, positive equity is the amount by which a realistic current vehicle value exceeds the lender’s current settlement figure. If a car is valued at £18,000 and settlement is £16,500, the simple equity position is £1,500 before transaction costs.
Why dealer quotes can differ
A dealer’s part-exchange valuation is a commercial offer, not the same thing as the retail asking price of a similar car. Online buying services, franchised dealers and private-sale estimates may all produce different values.
Can equity become the next deposit?
In many replacement transactions a dealer may propose applying available equity toward the next vehicle. Treat the whole proposal as a new deal: check the new cash price, deposit, APR, term, monthly payment and balloon rather than focusing only on the headline equity.
What if the value falls before the transaction?
Equity can disappear because vehicle values and settlement figures change. Re-check both close to the transaction date.
Do you own the car before settlement?
Under PCP the finance provider retains ownership until the finance is dealt with under the agreement. Do not privately sell a financed vehicle as though it were owned free of finance.
Primary and consumer sources
Your signed agreement and current lender figures control contract-specific amounts.
Last reviewed: 5 September 2026