settlement fee should i get a loan to pay?

dragons1

Hi all
I have a 2007 mini cooper 37k on the clock and my finance deal is coming to an end in March, they have given me a settlement fee of £4500, I started paying for the car 3 years ago for a purchase price of £13000 at roughly £240 a month.

I basically have 3 options from mini:

1) pay off the settlement fee and keep the mini
2) hand back the mini which would pay off the settlement fee
3) hand back but they pay a deposit on a new car and take out a new finance deal paying what i pay now.
4) take out a personal loan with maybe a lower interest rate?
5) refinance the car through mini

What would you do?
Thanks for any advice

It_can_get_better

Do you want to keep the car?

dragons1

yes the car works well for us at the moment. just need to make sure the figures work out

Empty_pockets

If you can get the £4500 loan at a good rate you won't have paid a great deal more then the original purchase price however is 2 years time what will the car be worth?

Tixy

If you want to keep the car that would seem to rule out options 2 & 3.

Are 1 & 4 different? by 1 do you mean you have sufficent savings you could pay off the finance with?

A personal loan for £4500 (assuming you need to borrow it all) - maybe won't have a cheaper APR than what you are paying now. It would depend on your financial situation and credit file. If you do take out a personal loan how much can you afford to repay a month to get the debt cleared?

dragons1

sorry 1 and 4 are the same your right, were not in the postion to pay it off without a loan. We currently pay 13.8% APR. Are their cheaper personal loans out there? we currently pay £250 a month so can keep paying that amout to get the debt cleared

dragons1

Empty_pockets wrote: »

If you can get the £4500 loan at a good rate you won't have paid a great deal more then the original purchase price however is 2 years time what will the car be worth?

This is what the car is currently worth according to mini

Tixy

Yes there are certainly cheaper loans than that around - but they are only available to some people. Some would be able to get APRs of around 8% or maybe even a little lower for the amount you wish to borrow.

But whether you could get a loan and at what APR will depend very much on how they assess the risk of lending to you. That will depend on many things including your credit history, what existing debts you have, how much you earn, etc .

wensleydaleuk

Have you thought about part exchanging for a newer car? According to Parkers a 2007 Mini Cooper 1.6 is worth £5,885 in part ex which would give you a nice tidy £1,385 deposit towards a newer car. This could possibly bring your payments down. Also you wouldn't have to purchase the Mini first, most dealers will be happy to settle on your behalf (assuming the part ex offer covers it of course!).

silo24

wensleydaleuk wrote: »

Have you thought about part exchanging for a newer car? According to Parkers a 2007 Mini Cooper 1.6 is worth £5,885 in part ex which would give you a nice tidy £1,385 deposit towards a newer car. This could possibly bring your payments down. Also you wouldn't have to purchase the Mini first, most dealers will be happy to settle on your behalf (assuming the part ex offer covers it of course!).

This is Option 3 in the Op's initial post.

wensleydaleuk

silo24 wrote: »

This is Option 3 in the Op's initial post.

Not quite - I'm assuming option 3 is with Mini themselves, however I'm suggesting shopping around to get a better deal.