What is car refinancing?
Refinancing your car is a practical way to make car payments more manageable without selling your vehicle.
Car refinancing involves replacing your current car loan with a new one that offers better terms. It is a practical way to make your monthly payments more manageable without selling your vehicle.
Refinancing is similar to switching your mortgage it lets you restructure your car finance. Whether you're looking to lower monthly outgoings, extend the term, or accelerate your path to ownership, refinancing could help.
You may also be able to refinance your balloon payment if you have a final lump sum payment on an existing car finance product. Allowing you to keep your car without paying the final payment in full.
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Benefits of refinancing a car
Lower interest rates
By paying less interest over the life of the loan you could reduce your monthly payments or pay off your loan earlier.
Reduce monthly payments
Free up cash flow or make monthly payments more manageable by refinancing over a longer term.
Keep the car for longer
Extending the term of your loan allows you to drive the car for longer without the pressure of a final balloon payment or having to trade it in early.
Accelerate the path to ownership
You could own your car sooner by refinancing to a shorter loan term or use it to pay off the final balloon payment.
Things to consider before choosing to refinance your car
- You may pay more interest in the long run. Extending your term may lower your monthly payments, but you could end up paying more interest.
- Some lenders charge fees for early repayment of your current loan or setting up a new one, which can reduce potential savings.
- If your current car loan exceeds the car's value, lenders may deny refinancing or charge you a higher interest rate.
- Interest rates may have risen since you took out your first agreement so you may not find a better deal.
Other finance options available
Hire Purchase (HP)
Hire Purchase offers fixed monthly payments and full ownership of the car once the agreement ends.
Find Out MorePersonal Contract Purchase (PCP)
PCP allows you to use the car until the contract ends before deciding whether to keep it or change it.
Find Out MoreLease Purchase (LP)
Lease Purchase gives you the benefit of lower monthly payments compared to a standard Hire Purchase deal.
Find Out MoreReleasing Equity
If you own a high-value vehicle and are looking for additional funds, you may be able to release some equity from your car.
Find Out MoreContact Us
Speak to our team about buying, selling or financing your next car.