Refinance my car
If you have decided to refinance and want to know what the process involves rather than whether to do it, this is that page. What we ask for, what the lender asks for, how long each stage takes and where cases usually stall.
- First conversation
- Same day
- Terms in writing
- 2 to 5 days
- Funds released
- 1 to 3 weeks
- Credit searches before you agree
- None
What we need from you to refinance your car
Refinancing a car requires four facts before anything else can happen: what the car is, what it is worth, what is still owed against it, and whether the borrowing is personal or for a business. Everything else follows from those.
The one people underestimate is the settlement figure. That is the amount your current lender will accept today to close the agreement, and it is not the balance printed on your statement. It usually includes interest to the settlement date and sometimes a charge for settling early. Request it in writing at the start, because the whole calculation depends on it.
After that: proof of identity and address, the V5C, the service history, and for a company application the filed accounts and recent bank statements. On an older or rarer car the history file does real work, because it is the evidence a valuer uses.
How long it takes to refinance a car
The first conversation happens the same day and takes about fifteen minutes. It establishes whether there is a workable case, and it happens before anything touches your credit file.
Terms in writing typically follow within two to five working days. That gap is the lenders considering the case, and it stretches when the car is unusual or when the accounts raise a question worth answering properly rather than quickly.
From acceptance to funds released is usually one to three weeks. The variable is the valuation. A current model with a live market can be valued quickly. A car that needs a physical inspection takes as long as it takes to get an inspector to it, and that is the stage where cases most often stall.
Where cases stall
Three things account for most delays: a settlement figure that has not been requested, a V5C in the wrong name, and an outstanding agreement nobody mentioned that shows up on the vehicle check. All three are avoidable and all three are quicker to sort out at the start than in the middle.
What speeds it up
Having the settlement figure, the V5C and the service history ready before the first conversation. On a company application, having the last two years of filed accounts to hand. None of it is unusual to be asked for.
What refinancing my car will cost
A worked example. A car at £120,000 owned outright, with £84,000 advanced against it at 70 per cent of value. Over 48 months at an indicative 8.9 per cent that is about £2,086 a month, and £100,145 in total.
Where an existing agreement is being settled, the amount released to you is the advance less the settlement figure. Owe £40,000 on that car and you receive £44,000, while the monthly payment stays the same, because the lender advanced the same £84,000 either way.
Fees vary more than rates do. Ask for the total payable across the term, the arrangement fee, and the early settlement position on the new agreement before you sign. Those three numbers tell you more than the headline rate does.
Should I refinance my car or sell it?
Selling releases the whole value and ends the running costs. Refinancing releases part of the value and you keep the car. Which is right depends on whether you want the car, and that is a question no broker should answer for you.
What we can say is where refinancing tends to win. It wins when the car is difficult to replace, when it is appreciating rather than falling, and when selling would trigger a tax event or break up a collection. It loses when the car is ordinary, easily replaced and costing money to keep.
We cover 92 models across 16 manufacturers, with an indicative value and advance band on each, so you can see what a car of yours is likely to release before deciding either way. The manufacturer index is the place to start.
Refinance my car questions
- Can I refinance my car if I am still in the agreement?
- Yes. The new lender settles the existing agreement directly. What you need is a settlement figure from your current lender and a car worth more than that figure.
- Will I have to give the car up while it is arranged?
- No. The car stays with you throughout and you drive it exactly as before. The lender registers security over it, which means it cannot be sold while the finance is outstanding, but possession never changes.
- Do you run a credit check before giving me terms?
- Not before you have seen the numbers. We establish appetite with lenders first and only submit formally once you have told us to proceed, because a credit file with a run of searches on it is worth less than a clean one.
Start refinancing your car
Tell us what the car is and whether anything is still owed on it. We come back with what a lender is likely to advance against it and what that would cost to service. If the answer is that it does not work, that is the answer you get.