A driver has shared how she slashed her car bills by £3,000 using a method that most UK motorists don’t even know is an option. Charlotte Coles, 32, from Basingstoke, was able to make the huge savings with a simple change to her car finance.
When bought her second-hand Kia Niro, she did so using a car finance agreement with a 15% interest rate. But a year later, she came across MoneySuperMarket’s car refinancing calculator, which you can use to switch from your current deal, even if you got it through a car dealership.
Ms Coles managed to strike a deal through the comparison site at a reduced interest rate of 10 per cent, pocketing £3,000 in savings. Charlotte uses her car all the time for journeys including work commutes, family visits across Essex and Gloucester, and outings with her pug.
She was able to use the extra funds towards a memorable holiday. She said: “We put that money towards an unforgettable trip to Australia to see family we hadn’t visited since before Covid.
“Having that extra cash made such a difference – we had an amazing time, fed kangaroos, saw koalas and went to Sydney Opera House…lived it up a bit in a way we couldn’t have without switching the finance on my car.”
Research from MoneySuperMarket uncovered that the average Brit is overpaying on car finance by £1,781. Yet more than 60% aren’t even aware they can refinance their vehicle mid-agreement.
Refinancing your car could be a smart financial move, especially if you didn’t compare rates when you bought your original deal or if your credit score has improved since. Moving to a new deal may improve your situation if you can get reduced monthly repayments or a lower APR.
Now is a good time to have a look around for better deals as interest rates may dip further in the coming months. That would mean better car finance deals could be on the horizon.
Alex Hasty, car finance switching expert at MoneySuperMarket, urged drivers to have a shop around. He said: “If you bought your car using finance, like Hire Purchase or Personal Contract Purchase, you might be able to make a saving on your current deal.
“The average amount drivers who switch through MoneySuperMarket save is £1,700 over the course of their finance agreement. That’s £56 a month – about enough for a tank of petrol for a small to medium sized car.”
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