Audi Car Solutions Finance, Refinancing

random549

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

[Deleted User]

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.

random549

I have a very good credit rating and a good salary so hopefully that shouldn't be an issue.

Gaz83

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%.

foxy-stoat

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.

nomoneytoday

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)

jonesMUFCforever

Will they allow you to repay the loan now but not the balloon?

chanz4

nomoneytoday wrote: »

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

chanz4

jonesMUFCforever wrote: »

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

Penelopa.Pitstop

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

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.