back to articles | March 07, 2024 | Moses Mwangi

Categories: Auto Loans & Financing Lifestyle

Can You Modify a Financed Car?

You have probably considered modifying your ride, especially if you fancy yourself as a car enthusiast.


You have probably considered modifying your ride, especially if you fancy yourself as a car enthusiast. From adding custom paintwork to installing a new music system, there are plenty of ways to make your car unique.

However, although modifications are usually okay when you own the car outright, they might result in severe consequences if you are paying off an auto loan. Depending on the changes done, they might also affect your auto insurance. So, is it possible to modify a financed car? Read on to learn whether you can modify a car on finance.

Can you modify a financed car?

The short answer is yes. Modifying a car that you have financed is completely legal in most cases. A car under auto financing is like a house with a mortgage; you can paint all the walls inside the house with whatever color you want. However, it's good to read your loan documents or contact your lender before making any changes to the vehicle. That way, you will know what modifications you can make without violating your loan terms.

Modifications can range from minor changes, such as adding a window tint, to major transformations, like installing a turbocharger. Therefore, there can be a wide range when it comes to what modifications a lender will or won't allow. Official modifications allowed by the automaker are typically covered under the vehicle's factory warranty, meaning they won't affect your loan terms or the relationship with the lender.

What do lenders consider to be modifications?

It's crucial to check with your lender to understand their view, whether you are planning for significant changes or just simple and regular adjustments. Here is what modifications can include:

  • Cosmetic changes: changing colors, installing new wheels, spoilers, diffusers, window tints, adding body kits, and light upgrades.
  • Performance upgrades: this includes slight adjustments to the engine, gearbox, exhausts, suspension, and brakes.
  • Entertainment or infotainment: upgrading the stereos, software, or screens.
  • Towing equipment: the addition of a tow-bar or battery upgrades.

These are just a few examples, so you should check with your finance company to be sure you aren't breaking their rules. The best place to begin your checking is in your finance or credit agreement. You should always have a copy of your agreements, but you can request another one from your lender if you have misplaced it.

If you check your finance agreement and find the information displayed isn't clear, contact your finance company. Explain the modifications you want to make and see what they say. It's actually worth doing this before you buy a car, too.

Should you modify your car?

This depends on your personal preferences and finances. Some individuals enjoy the process of modifying a car and will consider it worth it even when they don't see a return on their investment. If you enjoy upgrading your car and think the modifications are cool, go for it.

However, ensure that you make the required payments and that the changes you make won't lower your car's value. In addition, make sure that nothing you do to your vehicle will make it less likely that you will be able to trade it in or sell it in the future.

Modifications that add value to your car

There are several modifications that can boost the value of your car. Upgrades such as slightly tinted windows, a new stereo system, and glass coating can all make your vehicle more attractive to prospective buyers. Nevertheless, these changes are typically minor and don't add much value to your car. Most people prefer vehicles that have not been too modified.

It's perhaps best to avoid making significant modifications if you plan to sell your car. You won't see a return on investment in most cases and might end up reducing the value of your car. Most lenders also don't allow vehicle modifications until you own the vehicle, even though the upgrades increase the value.

Modifications that lower your car's value

Most individuals would rather own a stock car over one that has been modified, especially if the modifications are too expensive. Car modifications can also make it hard to sell your vehicle since only a few people are interested in purchasing it. You might end up selling your vehicle for far less than you paid for it originally. Some of the most common modifications that can lower your car's value include suspension upgrades, exhaust system upgrades, and adding body kits.

Final thoughts

Modifying a car while it's still under finance can be a bit complicated. To be safe, it's best not to make any changes to the car until you can pay off the loan and the vehicle is completely yours. Nevertheless, if it's really essential to modify your car, you can always talk with your loan provider regarding the modifications you have in mind.

Modifications made on the car still under finance might result in a disagreement between you and the lender. The car finance company may demand you pay for the car in full within two weeks (14 days). They might also repossess the car if you can't meet their demand for full payment. Be sure about anything you do to the financed vehicle and consult your lender first to avoid the consequences of violating your auto loan agreement.