Audi Car Solutions Finance, Refinancing

Hi All,

I took out a PCP loan with Audi to fund a car purchase in Dec 13 on a 4 year deal on a value of just under £20K @ 6.19%. I don't have to make the balloon payment until Dec 17, but given I could take out a loan at around 3.4% now and pay the settlement figure of £13.8K it makes a financial sense to me to proceed to re-finance.

Am I missing something obvious?

Thanks

Comments

  • The sticking point is getting the loan - you would need a decent salary and very good history to get a further 14k at a low rate.

    28k is a lot of borrowing.
  • I have a very good credit rating and a good salary so hopefully that shouldn't be an issue.
  • Gaz83
    Gaz83 Posts: 4,047
    Combo Breaker First Post
    Forumite
    random549 wrote: »
    I have a very good credit rating and a good salary so hopefully that shouldn't be an issue.
    Your credit rating is irrelevant, lenders don't see it.

    What matters is your credit history, which shows that you've currently got an outstanding debt of £13.8k.

    Can't see any lender willing to lend to you at 3.3%.
    "Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."
  • foxy-stoat
    foxy-stoat Posts: 6,879
    First Anniversary Name Dropper First Post
    Forumite
    random549 wrote: »
    but given I could take out a loan at around 3.4% now and pay the settlement figure of £13.8K it makes a financial sense to me to proceed to re-finance.

    Am I missing something obvious?

    Go and apply for a loan with the headline rate of 3.4% and see what you get offered, you probably need to put down the reason for the loan is to consolidate existing debt - doubt you will get offered the lowest rate to be honest but good lucks.
  • Don't forget that part of the PCP advantage is the balloon amount is guaranteed. If the car is worth less at the end of the debt, you can hand it back.
    If you pay off the PCP, then you'll have a separate loan, regardless of what you do with the car.


    In essence the PCP is the insurance on the future value.


    (all IMHO)
  • Will they allow you to repay the loan now but not the balloon?
  • chanz4
    chanz4 Posts: 10,859
    First Anniversary Name Dropper First Post Xmas Saver!
    Forumite
    Don't forget that part of the PCP advantage is the balloon amount is guaranteed. If the car is worth less at the end of the debt, you can hand it back.
    If you pay off the PCP, then you'll have a separate loan, regardless of what you do with the car.


    In essence the PCP is the insurance on the future value.


    (all IMHO)


    You would of thought, but infact its not. Google financial ombudsman decisions and look up vw. And yes you can get a loan at the less rate just like I did. You can also put it down as car purchase as pcp is only hire until you pay the balloon
    Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.
  • chanz4
    chanz4 Posts: 10,859
    First Anniversary Name Dropper First Post Xmas Saver!
    Forumite
    Will they allow you to repay the loan now but not the balloon?


    It will bring the balloon forward, its a way they do you over
    Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.
  • The amount mentioned in first post is settlement figure, so it's payin off rest of payments and final baloon payment.

    If you want to keep the car for a couple more years, it's worth doing it.
  • JJG
    JJG Posts: 329
    First Anniversary Name Dropper First Post
    Forumite
    foxy-stoat wrote: »
    Go and apply for a loan with the headline rate of 3.4% and see what you get offered, you probably need to put down the reason for the loan is to consolidate existing debt - doubt you will get offered the lowest rate to be honest but good lucks.

    It does depend entirely on the OPs income and credit history. I recently got a 19k loan at 3.4% to repay a loan at 5.9%. And consolidate existing debt was the reason.
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 342.2K Banking & Borrowing
  • 249.8K Reduce Debt & Boost Income
  • 449.3K Spending & Discounts
  • 234.4K Work, Benefits & Business
  • 606.7K Mortgages, Homes & Bills
  • 172.7K Life & Family
  • 247.2K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards