Most people do not know how car refinancing could net them a better deal on their repayments, though it can end up more expensive in the long run
Refinancing can also affect your credit score in the short term, but successfully keeping up repayments can lead to an improved credit score overall after time.
Carmoola’s research found one in seven drivers had never thought about switching car loan suppliers to reduce their bills, which 19 per cent of those polls believe these agreements last for the duration of the contract, when in fact they can be refinanced to save money. Many respondents said the process seemed complicated and was keeping them from investigating further.
“How much you’re likely to save will differ from one individual to another, but if your credit score has improved considerably since you took out your original agreement, and you’ve been making your payments on time, then it could be a considerable amount,” said Carmoola co-founder Aidan Rushby. “A lower interest rate could dramatically reduce your monthly payments, while opting for a longer contract term could also slim down your monthly outgoings if you’re looking for greater affordability.”Dumitru-Olivian Dirlau, 21, north LondonHe reduced his original APR of 26.8 per cent to just 12.9 per cent, saving nearly £8,500 on interest.Silva decided to switch his arrangement on his Range Rover Evoque to reduce it from 22 per cent APR to 16.
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