What is car finance refinancing?

It means replacing an existing car finance agreement with a new agreement. A comparison normally starts with the current settlement figure, payment, APR and remaining term.

Why do people review car finance refinancing?

They may want to review payment pressure, rate, term or the remaining cost. A review can clarify the difference between a lower payment and a lower total cost.

What figures should I gather first?

Gather the settlement figure, payment, APR, remaining term and agreement details. Vehicle value, mileage, condition and any relevant fees can also matter.

Is refinancing the same as buying another car?

No. It concerns the finance agreement, not necessarily changing vehicle. Selling, trading in or returning a vehicle can involve separate agreement conditions.

Can refinancing change a monthly payment?

It may, depending on the new rate, term and amount financed. A payment can look lower when the term is longer, which can increase total repayable.

Does a lower payment mean lower overall cost?

Not necessarily. Compare the total repayable, APR, fees and term, not only the monthly amount.

What if I cannot comfortably make my current payment?

Contact the current lender promptly to discuss available support. Independent money guidance can also help with a wider affordability review.

Can extending a term affect total repayable?

Yes, it can increase the total amount repaid. Spreading borrowing over longer can reduce the periodic payment while adding time and interest.

Can a PCP agreement be reviewed for refinancing?

It may be possible to review, subject to the agreement and eligibility criteria. Start with the settlement figure, vehicle value, mileage, condition and optional final payment.

Why is the PCP settlement figure important?

It shows the amount needed to settle the agreement at that time. It is time-limited and should be compared with current vehicle and agreement information.

Does mileage matter on PCP?

It can matter because PCP agreements often include mileage terms. Check the agreement and vehicle details before making any assumption about an alternative.

What is the optional final payment?

It is a feature of many PCP agreements that should be understood before comparison. Its timing and amount can affect the remaining commitment and end-of-agreement choices.

Can hire purchase be reviewed for refinancing?

It may be reviewed using the current agreement figures. Compare settlement figure, remaining balance, APR, term and total repayable.

What is the remaining balance on HP?

It is the amount still due under the current agreement, subject to its terms. A settlement figure provides the current amount needed to end the agreement.

Should I compare APR on HP?

Yes, alongside term, payment, fees and total repayable. APR is useful but it is not the only figure needed for a meaningful comparison.

What happens if I want to settle HP early?

Ask the current finance provider for the relevant settlement information. The agreement may set out the process, timing and any terms that apply.

What can affect eligibility?

Factors can include the current agreement, vehicle, affordability, credit profile and lender criteria. These factors are assessed differently by different providers and can change over time.

Will checking options affect my credit file?

The exact effect depends on the specific journey and provider. Read the information provided during the journey before submitting details and ask if anything is unclear.

Can a vehicle's value matter?

Yes, current vehicle value can be relevant to an assessment. Age, mileage, condition and market factors may also be considered.

Can self-employment affect an application?

Income evidence and affordability assessment can differ by provider. Provide accurate information and review what documentation may be requested.

How long does a settlement figure last?

It normally has an expiry date. Check the date on the figure and request an updated one if needed.

What is total repayable?

It is the full amount repaid over an agreement if payments are made as scheduled. It is important when comparing a lower payment against a longer term.

They can be, depending on the current and possible new agreements. Ask for clear information about fees, when payable and how they affect total cost.

Is a settlement figure the same as total repayable?

No. They answer different questions about the current agreement. The settlement figure concerns ending the agreement now, while total repayable concerns scheduled payments over time.

Car Finance Refinance FAQs | Compare My Finance

What should I compare?

Compare settlement figure, APR, monthly payment, term, total repayable, vehicle details, fees and early-settlement conditions. Do not compare only one figure.

Does PCP or HP make a difference?

Yes. PCP and HP can have different terms and end-of-agreement features. Read the agreement and collect the latest settlement figure before comparing options.

What if I am struggling with payments?

Contact the current lender as soon as possible to discuss the help available. Independent money guidance can help with a wider budget review.

Answers to common questions

What is car finance refinancing?: It means replacing an existing car finance agreement with a new agreement. A comparison normally starts with the current settlement figure, payment, APR and remaining term.
Why do people review car finance refinancing?: They may want to review payment pressure, rate, term or the remaining cost. A review can clarify the difference between a lower payment and a lower total cost.
What figures should I gather first?: Gather the settlement figure, payment, APR, remaining term and agreement details. Vehicle value, mileage, condition and any relevant fees can also matter.
Is refinancing the same as buying another car?: No. It concerns the finance agreement, not necessarily changing vehicle. Selling, trading in or returning a vehicle can involve separate agreement conditions.
Can refinancing change a monthly payment?: It may, depending on the new rate, term and amount financed. A payment can look lower when the term is longer, which can increase total repayable.
Does a lower payment mean lower overall cost?: Not necessarily. Compare the total repayable, APR, fees and term, not only the monthly amount.
What if I cannot comfortably make my current payment?: Contact the current lender promptly to discuss available support. Independent money guidance can also help with a wider affordability review.
Can extending a term affect total repayable?: Yes, it can increase the total amount repaid. Spreading borrowing over longer can reduce the periodic payment while adding time and interest.
Can a PCP agreement be reviewed for refinancing?: It may be possible to review, subject to the agreement and eligibility criteria. Start with the settlement figure, vehicle value, mileage, condition and optional final payment.
Why is the PCP settlement figure important?: It shows the amount needed to settle the agreement at that time. It is time-limited and should be compared with current vehicle and agreement information.
Does mileage matter on PCP?: It can matter because PCP agreements often include mileage terms. Check the agreement and vehicle details before making any assumption about an alternative.
What is the optional final payment?: It is a feature of many PCP agreements that should be understood before comparison. Its timing and amount can affect the remaining commitment and end-of-agreement choices.
Can hire purchase be reviewed for refinancing?: It may be reviewed using the current agreement figures. Compare settlement figure, remaining balance, APR, term and total repayable.
What is the remaining balance on HP?: It is the amount still due under the current agreement, subject to its terms. A settlement figure provides the current amount needed to end the agreement.
Should I compare APR on HP?: Yes, alongside term, payment, fees and total repayable. APR is useful but it is not the only figure needed for a meaningful comparison.
What happens if I want to settle HP early?: Ask the current finance provider for the relevant settlement information. The agreement may set out the process, timing and any terms that apply.
What can affect eligibility?: Factors can include the current agreement, vehicle, affordability, credit profile and lender criteria. These factors are assessed differently by different providers and can change over time.
Will checking options affect my credit file?: The exact effect depends on the specific journey and provider. Read the information provided during the journey before submitting details and ask if anything is unclear.
Can a vehicle's value matter?: Yes, current vehicle value can be relevant to an assessment. Age, mileage, condition and market factors may also be considered.
Can self-employment affect an application?: Income evidence and affordability assessment can differ by provider. Provide accurate information and review what documentation may be requested.
How long does a settlement figure last?: It normally has an expiry date. Check the date on the figure and request an updated one if needed.
What is total repayable?: It is the full amount repaid over an agreement if payments are made as scheduled. It is important when comparing a lower payment against a longer term.
Are fees relevant?: They can be, depending on the current and possible new agreements. Ask for clear information about fees, when payable and how they affect total cost.
Is a settlement figure the same as total repayable?: No. They answer different questions about the current agreement. The settlement figure concerns ending the agreement now, while total repayable concerns scheduled payments over time.

Car finance refinancing FAQs

What should I compare?

Does PCP or HP make a difference?

What if I am struggling with payments?

Answers to common questions

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