Loan to pay off car finance

markstevo

Hi All,

Looking to get a loan to pay off my car finance, just wanting a bit of advice if its worth it ( i think its a no brainer )

Car finance, settlement figure is 5k, currently paying £186 a month, 36 months to run on it = £6696 if i keep paying.

Loan £5000 for 2 years at 8.9% = monthly pmt of £228.19 total paid back £5476.

Or would it be an idea to pay 6 months payments of and vt car?

Trying to restructure debts as history and circumstances changed drasticly since i bought the car 2 years ago

Thanks in advance

Tixy

Have you been offered a loan at 8.9%? or are you going just from the representative rate?

Whether its a good idea to wait and VT the car depends on if you need a car, if you need/want a car of that age/value, assuming you are trying to cut costs could you manage with a cheap runaround owned outright?

markstevo

Thanks Tixy,

Yes loan has been offered,

To be honest i could more than easily do with a run about only travel 15 miles a day! i used to use the car for work but no longer.

Car is currently only worth tops 4k on a private sale if i was lucky, more like 3.5k...its a good car etc etc would be happy to keep but its not essential

Tixy

If you can afford the slightly higher payments then the loan seems like a better option that keeping the car on finance for 3more years, saving you £1k overall and also gives you more flexibitlity if you want to sell it at some point.

As to whether to VT I suppose it depends on how you feel and how tight your finances are etc

markstevo

Thanks again Tixy

I was pretty sure it would be cheaper to get the loan and pay off finance, just wanted reasuring lol


thanks

JimDuff

Im in the same boat, owe £6800 if i settle now on my car, quite a bit more if not, cars worth maybe £6500 privately but i can get a loan for £30 cheaper a month at a similar APR, dont know if its worth it