Can I Refinance the Balloon Payment on a PCP Deal?

Hello, i have come to the end of my finance agreement and have been asked to pay off the balloon payment or hand the car back. I'd like to keep the car if possible so can you refinance my balloon payment? You help and advice would be appreciated.

February 28, 2022

Yes! Here at CarFinance 247, we work with a panel of lenders and some of them can refinance the balloon payment on a PCP deal.

This type of loan would be a new finance agreement designed to help you keep your car and pay off your balloon payment in manageable monthly instalments.

The balloon payment is the amount you’ll need to pay to buy your car at the end of a PCP loan term. It’s based on the Guaranteed Minimum Future Value (GMFV) of your car and could range from a few hundred to a few thousand pounds.

If you can’t afford to cover the balloon payment without taking out finance, you don’t have to keep the car. One of the best things about PCP car finance is that it gives you options. Instead of buying the car, you could choose to give it back when your agreement ends or use any positive equity as a deposit in a new deal.

Refinance loans aren’t limited to balloon payments. If you’re in the middle of your loan term, you might be able to secure a better deal by refinancing.

When you refinance, you take out a new agreement to pay the balance on your existing loan. There are a few reasons why this might work for you. Maybe your circumstances have changed, and you’d like to swap to a loan with a longer term and lower monthly repayments. Or perhaps your credit score has improved, and you could secure a better interest rate. Refinancing could even be an option if you have a joint car loan and now want the finance to be in your name only.

My monthly budget is

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Rates from 8.9% APR. Representative APR 19.9%

My monthly budget is

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Rates from 8.9%: the exact rate you will be offered will be based on your circumstances, subject to status.

Representative example: borrowing £10,000 over 5 years with a representative APR of 19.9%, an annual interest rate of 19.9% (Fixed) and a deposit of £0.00, the amount payable would be £255.50 per month, with a total cost of credit of £5,329.80 and a total amount payable of £15,030.

We look to find the best rate from our panel of lenders and offer you the best deal that you're eligible for. We earn a commission for providing our services, but this does not influence the interest rate you’re offered in any way.

Amount to borrow

To pay over

5 years

Assuming your credit profile is:

Total cost of credit	£ 2000
Total repayment	£ 2000

48 monthly
payments of

£ 245 98

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Rates from 9.9%: the exact rate you will be offered will be based on your circumstances, subject to status.

Representative example: borrowing £25,000 over 48 months, £3,750.00 deposit, on PCP, with annual mileage of 8,000pa, and a representative APR of 11.9%, an annual interest rate of 11.9% (Fixed), the amount payable would be £394.51 per month, an optional final payment of £7,194.33, with a total cost of credit of £9,912.36 and a total amount payable of £28,444.33.

We look to find the best product from our panel of lenders and will offer you the best deal that you’re eligible for. We earn a commission for providing our services, but this does not influence the interest rate you’re offered in any way.

I have existing finance related questions

Hi Rachel, i have recently taken out car finance with barclays finance but i now need a bigger car. Is there any way i can change it without paying off the full amount?

Asked by Bethan Davies
February 28, 2022

Hi Bethan, we'd need to establish whether the finance you have from Barclays is a personal loan or whether it's secured against the vehicle.

If it is a personal loan you could sell your current vehicle with no problems (as the finance isn't associated with the vehicle) and pay Barclays back an amount that you are comfortable with. You could also keep the existing arrangement in place with Barclays if you wished. You may have to check this though.

You could then apply for a new finance agreement on a bigger car with us and we'd provide a no obligation quote and you could choose a car from any dealer. So the answer to your question is yes but you'd have to check what type of loan agreement you have with Barclays first. Kind Regards, Rachel

I have Barclays car finance and its not a personal loan. Could I still change my car?

Asked by Stephanie Haigh
February 28, 2022

Hi Stephanie, thank you for your question.

Even though you have finance associated with your car you can still swap it. All you need to do is part exchange the car in at a dealership where you want to purchase a newer car. The dealer will give you a price for your current car and hopefully it is more that what you owe Barclays. The dealer will then settle the finance and use any equity as a deposit towards a newer vehicle.

We can usually beat dealer rates and once approved with us we provide a no obligation quote and you can choose a car from any dealer. Please make an application when you are ready and we'll help guide you through the process. Kind Regards, Rachel

Hi, I have been provisionally accepted for finance by yourselves and have seen two cars that I wish to purchase. I am p/x my car but it will have about £1,500 negative equity. Can you help?

Asked by Angela Brown
February 28, 2022

Hi Angela, we can potentially help get you out of your negative equity. Do you have any cash deposit that will help the situation?

Hi, I have a 58 plate Vauxhall Astra which I bought in Feb 2012 for £6000. I pay £253 a month and recently asked for a settlement amount which was £5793 and current dealership offers are between £4000 and £4800.

Could I get a

Asked by Daniel Dunne
February 28, 2022

Hi Daniel, thank you for your question.

If you can get £4800 for your current car it looks as though you're in £1000 negative equity. Would you have any cash at all to make up some of the difference as this would help us get you into a better deal?

We can help people who are in negative equity and if you've had a recent clean credit history i'd like to think we can get you a better rate than you're currently on. Please apply when you're ready and if approved you can choose a car from any dealer and we do provide a no obligation quote. Kind Regards, Rachel

Hi there. I bought a Ford Focus about 18 months ago, never missed a payment, all on time. I went to a mainstream dealer to try and trade for a different car and got knocked back on finance. I have approx £1800 negative equity. Is this something you would

Asked by Nathan
February 28, 2022

Hi Nathan, thank you for your question. We can help customers with negative equity by adding it onto a new finance deal, however the maximum most of our lenders will add is approximately £1000. Apologies we can't help you with this. How long is your finance deal? If you are 50% of the way through your agreement or more you may be able to voluntarily terminate the deal. Have you considered this? Kind Regards, Rachel

Hi, i sent a question yesterday. I currently have finance with another company, with 1 year left to run, i am unable to VT due to the nature of the agreement. I currently pay £220 per month with 12 payments left. The vehicle is valued at £1900 with the fi

Asked by Ivan Horsman
February 28, 2022

Hi Ivan, apologies for the delay in coming back to you. The answer is Yes! We will be able to cover the £800 negative equity you have in your vehicle and place the shortfall on top of your new car finance agreement. Do you have a deposit and have you got good, average or poor credit? Regards, Rachel

Hi, I am in a position whereby my current car finance still has £5.5k left and I need to upgrade my car as my job has changed and I need something smaller and more fuel efficient. Unfortunately I have negative equity and the main delaers will not approve

Asked by Bernadette Patchett
February 28, 2022

Hi Bernadette, thank you for your question and apologies for the delayed response. Are you over 50% of the way through your finance agreement? If so, you may well be able to voluntary terminate your current agreement enabling you to just hand the car back without any charges. You'll need to read your agreement first and perhaps seek some free legal advice. If you can "VT" your agreement it will get you out of your current position without any charges or having to pay the difference between the outstanding amount owed and the cars value. Kind Regards, Rachel

Hello, i have about £800 negative equity and a poor credit history. Can you get me finance on another car? Cheers, Lee

Asked by Lee A
February 28, 2022

Hi Lee, £800 negative equity is manageable to place into another deal so yes please apply when you have 5 minutes.

I have a car on HP with which is negative equity. my settlement is 2200 and car is worth £1200 and £1400. I do not have a very good credit rating and work 24 hours a week. Will I be able to get a new car?

Asked by Rob
February 28, 2022

Hi Rob, if you find a cheap car we could possibly tie up your negative equity into a new deal. Please apply when you can.

Hello, my settlement figure is £5900 but my car is worth £3500. Can you help me get into a new car? Many thanks

Asked by Harvey Bolton
February 28, 2022

Hi Harvey, £2400 negative equity would be too much for us to cover to be honest. You'd need at least £1400 cash deposit to give us a chance of helping you. Would that be possible? KR, Rachel

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