Can I modify a car on finance?

Wheels, tow bars, and even floor mats count as modifications. But can you modify a car on finance?

John Evans
Jul 1, 2019

Just as you might redecorate or extend your house when you get bored with it or want to improve it, so you might also be tempted to modify your car. It may be something practical like fitting a tow bar. Or a simple aesthetic change like fitting new wheels to it.

Or heck, it might be something more ambitious, such as increasing the performance of the engine or changing the car’s appearance with a body kit or a vinyl wrap.

That’s all fine if you own the vehicle. But if you’ve taken out finance on it or a loan secured on it, you could be in serious trouble and at risk of losing it or having to pay a large sum of money to own it.

Below we explain the issues surrounding modifying a car on finance.

Car deals with finance

Can I modify a car on finace?

Under most types of finance, until the loan is settled, the car is owned by the finance company and is its asset. Under most of these circumstances, you are not allowed to modify a car in any kind of way.

Some finance providers will allow customers to modify a vehicle with the provider's consent. After consent has been given, and before the customer returns it, the car must be restored to the condition it was in when acquired.

A car paid for outright using cash or an unsecured bank loan becomes the property of the owner, who can modify it as they wish. However, if they were to default on their loan repayments, the lender could seize the vehicle or other property to recoup its money. Even then, they may not make enough on disposal to settle the outstanding loan (perhaps if the car has been modified), meaning the former owner would still be in debt to it.

What constitutes a modification on car finance?

Anything that changes the appearance or specification of the car when it was originally acquired constitutes a modification. We’ve already mentioned major changes such as increasing the car’s performance or fitting new wheels. Changing the radio, fitting video screens or fitting a towbar would also constitute a modification. 

At the other extreme, a spokesman for BMW Finance told BuyaCar that even swapping the bespoke mats that come with the M Sport pack for another item would constitute a modification. BMW's finance agreement appears to cover any modification, small or large, although the spokesman said changing so-called consumables such as tyres would not be regarded as a modification.

What should I make sure of when acquiring a car on finance?

Above all, understand that the finance company remains the owner of the car throughout the finance term. You are not buying the car, but renting it from the finance company.

Understand the rules governing the mileage and condition of the car, as well as modifications, and how they apply not only at the end of the agreement but during it. This is because at all times during the finance agreement, the car must be worth its predicted value should it need to be disposed of.

Make sure all this is clearly explained to you before entering into the contract – and on no account modify the car without the consent of the finance company.


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