Refinancing PCP balloon - rec's with a decent APR%?

[kmpowell]

I have a PCP balloon on my 'weekend/fun' car of c£66k which will need refinancing this coming July. The car currently has indicative retail values of around £85k, and trade values of circa £75k, so there's a good bit of equity there. The car was bought brand new and is a keeper, so with that in mind I'm not looking to put any 'deposit' down, simply carry on repayments in another agreement with another balloon at the end of the term i.ee slowly payback the capital and keep equity ahead of depreciation which should (fingers crossed) level off a bit more in the next few years as the car gets closer to 4yrs old.

The supplying finance company have quoted 11.4% to refinance, which they say is non-negotiable. My bank (Lloyds), are offering 6.5% on a PCP.

So I thought I'd ask the PH font of knowledge if there were any other options people would suggest/recommend(?) outside of the usual magnitude etc who are all seemingly currently at circa 9%.

TIA

[thr32]

Do you have enough equity in your house - and would you be willing to use that equity - to extend your mortgage, then overpay that as appropriate at your target level of repayment?

TH

[kmpowell]

thr32 said:

Do you have enough equity in your house - and would you be willing to use that equity - to extend your mortgage, then overpay that as appropriate at your target level of repayment?

TH

Interesting, I hadn't considered that option. That wouldn't in any way be secured on the car value though, I assume?

Rolling car finance risk into my fairly solid mortgage position does worry me a bit though. I have plenty of equity in the house (LTV is only around 20-25%), and I locked in 5yrs just before the rate rises, at c1.75%, so I wouldn't want to disrupt that in anyway.

[LowTread]

Nothing stopping you taking out an additional mortgage.

Personally i'd be taking out an offset arrangement. The interest % is higher, but you can offset any savings against the interest each month.

a) you get to keep your savings as cash should you need to dip into it
b) the "interest" you're earning (or more accurately aren't being charged) isn't attracting income tax.

It's something i've mentioned to my wife a few times. We're mortgage free but i'd be open to having an arrangement with the bank of £100k or so as a slush fund. If we don't use it then the cash sits there offset so doesn't cost us anything in interest, but if we want to splash out then it's there.

Obviously you need to take into account the arrangement/valuation fees. On offsets they tend to be quite chunky.