[handyman]

My PCP deal ends in August 2017. The interest rate is 8.9% which seems pretty high. I'm wondering if it's possible to refinance with another company, therefore lowering my monthly payments? I'd still like to keep the same structure as before, as in, keep the final balloon payment, I just want to pay less interest over the remaining term. Think of it like re-mortgaging a house.

Is this possible?

 

[Rocket88]

You're going to have to take a separate loan to finance the settlement from BMW. You might get a better deal but it wouldn't be a continuation of your current deal for sure.

 

[handyman]

Thanks Rocket88. Yes, I realise that it would be a new deal with a new company, not BMW and that my deal with BMW would end. Just wondering if it is actually possible to do it though.

 

[WATTS 235i]

I thought you could refinance the balloon payment with BMW and work out a deal if you wanted to, that is unless you could get a cheaper Apr rate from a bank.

 

[Chazclark2]

You'd be surprised how few people refinance the balloon payment and actually buy the car on PCP, most car makers really up the APR when you re finance the balloon payment in order to more or less force you to buy another new car after all this is essentially what PCP is geared to, if you've got a decent credit rating then it would be far cheaper to buy it via a bank loan

 

[handyman]

Sorry guys, perhaps I am not explaining myself properly. I don't want to refinance the balloon payment now or at the end of my current deal. I want to take what I owe to BMW between now and the date that my PCP ends (Aug 2017) and refinance that amount. Effectively, get a better rate on what I owe to BMW between now and then.

 

[fisen]

worth calling bmw finance, you should be able to increase the deposit thefore reducing the amount financed , ie put another 15 grand in from your bank loan, but remember you would still be getting charged 8.9% on whats left, why not take a loan for the full amount of the car ( i suppose less favourable if you where intending to hand it back)

 

[marco_polo]

If you want to keep the BMW balloon the same, but refinance the payments, I don't think so! If you defaulted, who would claim the car back? I doubt BMW want to get into shared ownership with Barclays, or whoever.

You'd have to pay BMW off fully, via a loan from somebody else for the full amount.

 

[Chazclark2]

There's no way BMW will adjust the APR in your favour, why did you accept such a high interests rate?
If it's lowering your monthly payments your after then paying a lump sum off the finance will do that, or maybe they might and I use the word loosely extend the time you borrowed over as that will benefit both of you ie they will get more money in interest but you will get lower monthly payments.

 

[Tooks]

Get a settlement figure from BMW finance, see what finance or loan terms you can get for that amount?

That will have to be for the whole amount though, including balloon. Should still be possible to get a good deal though?

 

[handyman]

You'd have to pay BMW off fully, via a loan from somebody else for the full amount.

Yes, I know. I am asking if this is possible. Is there a company out there that will offer PCP finance that can be used to pay off an existing deal?

 

[marco_polo]

It would need to be a 'bank' loan for the full outstanding amount, £25k or whatever.

 

[handyman]

There's no way BMW will adjust the APR in your favour, why did you accept such a high interests rate?
If it's lowering your monthly payments your after then paying a lump sum off the finance will do that, or maybe they might and I use the word loosely extend the time you borrowed over as that will benefit both of you ie they will get more money in interest but you will get lower monthly payments.

I'm not asking BMW to adjust anything.

This isn't about affordability, it's about getting a better deal. People do it with mortgages, loans and credit cards every day.

 

[Kerr]

Reading what others have said before, often third parties have lower GFMV than BMW.

I'd also not liking the chances of getting a good PCP for just 18 months.

I'm not sure there is many ways of reducing your monthly outgoing. I think you'll either need to ride it out and accept you've signed up to a bad deal, or finance the entire car to try and get some equity out of it.

Will dropping a few percent interest make much of a difference?

 

[nickfrog]

I'm not asking BMW to adjust anything.

This isn't about affordability, it's about getting a better deal.

I am not sure that PCP was the right choice in the first place

 

[handyman]

I am not sure that PCP was the right choice in the first place

How can you make such a comment when you don't know me or my circumstances?

 

[handyman]

I'm not sure there is many ways of reducing your monthly outgoing. I think you'll either need to ride it out and accept you've signed up to a bad deal, or finance the entire car to try and get some equity out of it.

Will dropping a few percent interest make much of a difference?

Thank you. You are right, probably not, but I wondered if anyone had done something similar.

 

[nickfrog]

I am not sure that PCP was the right choice in the first place

How can you make such a comment when you don't know me or my circumstances?

Fair point! You did mention "better deal". It could have been better to start with is what I meant as PCP is rarely cheap. But I accept that circumstances do limit choices. I didn't mean to sound condescending so apologies.

 

[CJ92]

I think you will find the answer to your question is No.

Its all in the small print of your agreement..

 

[ASB1960]

There are a number of companies which offer pcp on a used vehicle. Amongst the bank lloyds group have some decent deals.

frankly though I think you will struggle with getting a decent 18 month deal.

if you are disciplined and have a flexible mortgage; or can eaisly add to it you could consider using those funds to settle the existing pcp and increasing mortgage payments and then repaying the lump when the vehicle is sold. But this would mean you haveataken on the asset price risk yourself.

if you are not disciplined it could turn into an unmitigated disaster.

an alternative might be a personal loan over a longer period ajd settle early. Equally a zero rate credit card could achieve the same thing in some cases. But again you are assuming the asset price risk rather than leaving it with the financier.