Car finance vs bank loan

TheBlacklist2013

Hi 

I have car finance with Blue motor finance since Oct which is based on 14.9% APR. Is it worth getting a loan from my bank which is based on less monthly payments to pay off the car finance and clear the HPI, so this would enable me to sell off the car, if required. 

Thanks

MorningcoffeeIV

If you can get one and you do actually clear the finance, then yes.

When you say 'less monthly payments', do you mean 'lower' or 'fewer'?  Unless you're struggling, then try to keep the monthly payments at least the same.

TheBlacklist2013

They are lower, by £20-30. 
I am not struggling as such, but was thinking if I can clear it off with lower payments, then why not. The HPI would be clear and if I sell off the car later, I'd get the full amount. 

MorningcoffeeIV

TheBlacklist2013 said:

They are lower, by £20-30. 
I am not struggling as such, but was thinking if I can clear it off with lower payments, then why not. 

Because it increases the amount you pay in total.

The smart move is to get the lowest interest rate with the highest repayments and therefore shortest term.

TheBlacklist2013

No they bank loan I am thinking is a 4 year loan (same as my remaining car finance), and I will end up paying less. Probably by £1k. Obviously I'd do the math before proceeding with this, but was just putting it out to see if this is sensible. 

molerat

What is the APR of the loan ?

TheBlacklist2013

The bank advertises 6.4%, but I think I would end up getting between 8-9%

MorningcoffeeIV

TheBlacklist2013 said:

No they bank loan I am thinking is a 4 year loan (same as my remaining car finance), and I will end up paying less. Probably by £1k. Obviously I'd do the math before proceeding with this, but was just putting it out to see if this is sensible. 

You'll pay less than the higher rate loan, but more than you need to by having lower monthly payments.

Remember that interest is based on balance, rate and time. 

You simply need to overpay to the your current level to save the cash and pay less.