How Can You Modify A Financed Car?

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Alexandra Paul quotes, “The cars we drive say a lot about us.” For car owners who are automobile enthusiasts, making modifications to their cars is a dream. But the question is are you allowed to modify a financed car? The single-word answer to this question is Yes. You can make modifications to your car even when it is on a loan. There are some upgrades that are allowed on your financed car but your dealership or lender might not allow you to make certain modifications. This makes it important for you to identify what changes and upgrades are considered modifications and what are the ways to modify a financed car

In this article, we will be sharing with you all the details that you will need for modifying a financed car. We will help you identify what a car modification is and what factors you should consider when you have a car loan, modification options that are allowed on a financed car and how modifications will affect the value of your car and the warranty. 

Can I Modify A Financed Car?

“Are you allowed to modify a financed car?” Many car owners whose cars are purchased on a loan are confused about getting modifications for their cars. While modifying your car to reflect your style or make the car more comfortable for you is very common, you need to make sure that your lender does not raise any objection against the same. You might be allowed modifications like window tints or changing the lights that may be reversible. Some modifications might be objected against unless you take full ownership of the car. I 

If you are new to modifications and wish to modify a financed car, this list will help you identify some common modifications. You can then check your car loan contract to find out which of these modifications are allowed for you. 

  • Changing the exhaust system of your car
  • Installing turbos or superchargers
  • Changing normal lights to LED lights
  • Altering your dashboard
  • Upgrading air filters
  • Upgrading screens, stereos and software
  • Changing suspension
  • Installing a sunroof
  • Fitting of alloy wheels
  • Altering the air conditioning system
  • Replacing the brakes
  • Tinting the windows
  • Altering the transmissions or gearboxes

Factors To Be Considered When Modifying A Financed Car

Having a financed car means that you are currently repaying the loan and have a fixed monthly payment that goes towards this loan. This will continue till the time the entire loan amount has been repaid along with the interest charged. After this, the car belongs to you and you own a car. While you are still repaying the loan, what are some factors that you must consider before you modify a financed car? 

Once your loan is completely paid off, you will be taking full ownership of your car. Before that, you are allowed to make modifications and upgrades to the various features of the car for which you are paying the loan. There are not many restrictions on what you can or cannot modify in a financed car. But you must be careful and read through the loan terms and conditions. There might be a few lenders or dealerships that will not allow you to make certain changes or modify some features of your car. If you are not sure about keeping the car and are considering selling it in a private setup later or trading in your car, you must avoid making modifications that could reduce the value of your vehicle. Modifying a finance car should be considered only after checking the terms and conditions and ensuring that the modification will not lower the value of the vehicle drastically. 

How Do Car Modifications Affect The Value Of Your Car?

As a car owner, you must be aware of car depreciation too. The value of a car decreases by a certain percentage every year. From the moment, a car leaves the lot and gets on the road, its value starts dropping. There are also certain other factors that can lead to the depreciation of your car. Modifications made to your car are also considered in such factors. What is a car loan modification that can lower the value of your car? Let us find out. 

Generally, a modification that you get for your car will not hold any value by when it is time to sell your car. A few types of modifications will make it harder for you to sell the car as your personal taste might not be something that another buyer would like. Irreversible modifications made to a car can also reduce the worth of the car compared to what it was before any modifications were made. When you modify a financed car, if you keep the replaced parts safely and in good condition, you can offer the same to the next buyer which can add more value to the sale you are making. This is how you can use modifications to your benefits. 

Do Car Modifications Affect The Warranty Of Your Car?

Can your car modification affect your warranty coverage? In the previous sections, we have helped you understand car modifications for financed cars and what you must consider before getting the modifications you want. If your vehicle is on a car loan, modification companies may or may not inform you of how the modification will impact your warranty coverage. 

Car manufacturers are required to clearly mention the situations that could possibly violate the terms of warranty coverage according to the Magnuson Moss Act. The automaker may deny you to claim the amount for certain failures that might have occurred due to certain modifications while you will be able to claim the amount for managing other damages despite the fact that they are caused by modifications made by you. This is why you must carefully read the terms and conditions listed by your warranty company. This will help you know the modifications that you are not allowed to make to keep your warranty cover unaffected and accordingly, you can modify a financed car.


In this article, we have shared with you all the important information related to modifying a financed car. We hope this article will help you check your loan agreements and find out what modifications you can get for your car. When you picture a modified car, shiny rims, big wheels, paint jobs and flashy lights are some options that will immediately cross your mind. While these are some common modifications, there are also other options like upgrading the music system or getting better seat covers or changing the type of lights. What you need to know is whether or not you are allowed to make such modifications to your financed cars. You must make sure the modifications you get do not lower the value of your car or affect the warranty of the vehicle. When you modify a financed car, there are chances of lowering the value of your car. You must try and get modifications that are easily reversible and do not impact you financially. 


All set to get your car modified? Here are some common questions that are asked by car owners before modifying their financed car. To help you solve any further doubts regarding modifying a financed car, we have answered these questions in detail. 

Can I modify my car if it’s on finance?

Yes, you are allowed to modify your car even if you have borrowed a credit or bought your car on a loan. 

Can I trade in my financed car in Canada?

Yes, you can trade in your financed car in Canada. What you need to know is that if your loan is not completely paid, you will have to pay the loan even after you have traded in your financed car. 

How can I get out of a financed car in Canada?

You might be in a situation where you need to get out of the car loan. The following methods can help you get out of a financed car in Canada:

  • Make a lump-sum payment and complete the loan payment. This is a good option if you have the required amount to close the loan. 
  • Refinance your loan. This is an opinion offered by lenders if you have a high credit score and good repayment history. You can get a loan for the remaining term at lower interest rates by refinancing. 
  • Another option for you is to trade in your financed car. 
  • Sell your car in a private setup. You can always figure out the price at which you can sell the car you have and find buyers who are willing to buy your used car. All you need to do is get your car all prepped up for being sold and make the sale. 
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