Calculator
Refinance Calculator
Already paying for car finance? If rates have dropped or your credit has improved, refinancing to a lower APR could save hundreds or thousands. Run the numbers.
Your details
PCP result
Total Amount Payable
£29,386.98
This is the total that leaves your account — deposit + all payments + balloon
Representative Example
Dropping from 14% to 6.9% APR on a £12,000 balance over 36 months saves ~£1,400 in interest.
Even after an early settlement fee of 58 days' interest (~£270 at 14%), you're still £1,100+ better off. The maths is clear — but most people never check.
How car finance refinancing works
- Get your settlement figure. Contact your current lender and request a settlement quote. They must provide it within 12 working days.
- Shop for a new rate. Get quotes from banks (personal loan), brokers, or dealers. Compare the new total cost against your remaining total cost.
- Settle the old agreement. Pay the settlement figure using the new finance. For HP, ownership transfers to you (briefly) then to the new lender.
- Start the new agreement. You now pay the new, lower rate for the remaining term — or a different term if you prefer.
When refinancing makes sense
- Your credit has improved. If you took out finance with poor credit and have since built a better profile, you may qualify for a significantly lower APR.
- Market rates have dropped. If the Bank of England base rate has fallen, personal loan rates and dealer finance rates tend to follow.
- You're on a high-rate broker deal. Brokers like CarFinance247 (19.9% rep APR) or Moneybarn (30.7%) charge far more than a bank personal loan. If your credit now qualifies you for a 4–6% personal loan, the savings are substantial.
- You're past the first year. Early settlement penalties are proportionally higher in the first year due to how interest is front-loaded. Refinancing in year 2+ of a 4-year deal gives you the best savings-to-penalty ratio.
When refinancing doesn't help
- You're near the end of the term. If you have 6 months left, the remaining interest is minimal. The hassle and fees outweigh the saving.
- The rate improvement is small. Dropping from 6.9% to 5.9% on a £10,000 balance over 24 months saves about £100. After fees, it's barely worth the paperwork.
- You'd extend the term. If refinancing means stretching from 2 years remaining to 4 years at a lower rate, the total interest may actually increase despite the lower APR.
Refinancing PCP — the complications
PCP refinancing is more complex than HP or personal loan. Your settlement figure includes the balloon payment, so the amount you need to refinance is higher than just the remaining monthly balance. You're effectively converting a PCP into an HP or personal loan.
Check whether the car is in positive equity first. If the car's current value exceeds the settlement figure, refinancing works cleanly. If it's in negative equity, you may need to fund the shortfall yourself or find a lender willing to lend more than the car's value — which usually means a higher rate.
The FCA commission scandal context
The FCA's 2021 ban on Discretionary Commission Arrangements (DCAs) means dealers can no longer inflate your APR to earn higher commission. But millions of pre-2021 agreements were sold at inflated rates. If you took out car finance before January 2021 and are still paying, you may be owed a refund — and refinancing to a fair rate is the immediate action you can take while awaiting any compensation.