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  • FIRST POST
    • davida1992
    • By davida1992 11th Oct 18, 11:45 PM
    • 16Posts
    • 1Thanks
    davida1992
    Hire Purchase Car - Change to a different finance company?
    • #1
    • 11th Oct 18, 11:45 PM
    Hire Purchase Car - Change to a different finance company? 11th Oct 18 at 11:45 PM
    Hi all,
    I am hoping to get some assistance here, a few days ago I purchase a used car from an Audi dealership and I decided to use their Hire Purchase finance to finance the car. I put down a 2,000 deposit and took the finance with them over 5 years for the remainder.

    The hire purchase/loan is through Santander (Audi use them) and the loan amount was for approx 12,000. I was trying hard to get the monthly repayments down and they are currently sitting at an affordable amount, around 265 per month. I can afford this so it isn't really an issue.

    My concern is that I have done some more research (I know it is a little late after I have purchased the car), but it seems that I am going to pay about 5k interest on the loan over 5 years, which seems a little excessive compared to what some other loans are offering online.

    Is there anything I can essentially do. For example to refinance the Hire purchase with another company, have them pay off the existing loan with Santander and then hopefully that will result in less interest and lower repayments.

    I do understand I may have made a mistake here, so I am just wondering what options I have moving forward from here if anything. Is this usually something people do?

    I have never really taken any loans or HP on a car before so this is all new to me, I am good at managing my money, but I think I may be paying more than I should be here.

    Help and support appreciated

    Thanks very much in advance!!
Page 1
    • Mercdriver
    • By Mercdriver 12th Oct 18, 3:21 AM
    • 2,050 Posts
    • 1,397 Thanks
    Mercdriver
    • #2
    • 12th Oct 18, 3:21 AM
    • #2
    • 12th Oct 18, 3:21 AM
    You can settle the finance at any time with cash or any loan secured on the car or not. But you will have to pay any penalties or interest charges as specified on your HP contract. Of course the cheapest way of doing it is before you sign on the dotted line.
    • neilmcl
    • By neilmcl 12th Oct 18, 10:14 AM
    • 11,796 Posts
    • 8,541 Thanks
    neilmcl
    • #3
    • 12th Oct 18, 10:14 AM
    • #3
    • 12th Oct 18, 10:14 AM
    As with all finance packages you have 14 days in which to cancel however this just cancels the finance not the car purchase so you will have to get something in place to fund the purchase instead.
    • BethanyD
    • By BethanyD 12th Oct 18, 10:58 AM
    • 93 Posts
    • 45 Thanks
    BethanyD
    • #4
    • 12th Oct 18, 10:58 AM
    • #4
    • 12th Oct 18, 10:58 AM
    Find an alternative and Cancel within 14 days if you do
    Hi there! Weve had to remove your signature. Please check the Forum Rules if youre unsure why its been removed and, if still unsure, email forumteam@moneysavingexpert.com
    • davida1992
    • By davida1992 12th Oct 18, 11:57 AM
    • 16 Posts
    • 1 Thanks
    davida1992
    • #5
    • 12th Oct 18, 11:57 AM
    • #5
    • 12th Oct 18, 11:57 AM
    Thanks guys, I will take a look, I am guessing on a 13k car, paying back 17k is quite a bad deal?

    Thanks
    • wgl2014
    • By wgl2014 12th Oct 18, 12:09 PM
    • 885 Posts
    • 558 Thanks
    wgl2014
    • #6
    • 12th Oct 18, 12:09 PM
    • #6
    • 12th Oct 18, 12:09 PM
    Depends.....

    If you are eligible for a better rate loan then it's expensive, if you're not then it limits your options.

    As an example Tesco have an online loan calculator, 12k over 5 years results in just under 1k interest. This is with 3% apr.
    • AdrianC
    • By AdrianC 12th Oct 18, 1:01 PM
    • 18,707 Posts
    • 17,083 Thanks
    AdrianC
    • #7
    • 12th Oct 18, 1:01 PM
    • #7
    • 12th Oct 18, 1:01 PM
    APR is the key figure to determine the "value" of a loan.
    • macman
    • By macman 12th Oct 18, 3:51 PM
    • 42,717 Posts
    • 17,985 Thanks
    macman
    • #8
    • 12th Oct 18, 3:51 PM
    • #8
    • 12th Oct 18, 3:51 PM
    You have made the classic mistake of looking (first) at the monthly repayments, not the total sum payable over the term. And, with a used car, it is likely that you will still be repaying in 5 years time for a vehicle you no longer own.
    No free lunch, and no free laptop
    • davida1992
    • By davida1992 12th Oct 18, 4:22 PM
    • 16 Posts
    • 1 Thanks
    davida1992
    • #9
    • 12th Oct 18, 4:22 PM
    • #9
    • 12th Oct 18, 4:22 PM
    I've certainly learnt my lesson after this
    • BethanyD
    • By BethanyD 12th Oct 18, 6:29 PM
    • 93 Posts
    • 45 Thanks
    BethanyD
    Find out how early can hand the car back (it's on HP) without penalty charges
    Hi there! Weve had to remove your signature. Please check the Forum Rules if youre unsure why its been removed and, if still unsure, email forumteam@moneysavingexpert.com
    • JP1978
    • By JP1978 12th Oct 18, 8:13 PM
    • 450 Posts
    • 308 Thanks
    JP1978
    5 yr finance on a used car isn’t ideal. If you can afford the monthly figure already mentioned, get a shorter loan that equates to the same monthlies.
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