Car Refinance Options?

P

PotatoGuardian

Senior Member
Joined
Jul 3, 2014
Messages
681
Reaction score
205
Location
Cape Town
Car is financed through Audi financial services (no balloon payment). But with a baby on the way we need to make space for a second car.

Could I approach Wesbank to take over my loan and hopefully they offer a lesser interest rate? Current rate is 12.25%. Excellent credit score etc.

I could just pay the car off but that's risky as it would be a massive savings dump and not sure if that is wise
 
koffiejunkie said:
Sell the Audi and buy two sensible affordable cars. Preferably 2nd hand. Use the difference to move out of the mold-infested dump before the baby arrives.
Click to expand...
Worked this out and because I put down a big deposit on the car and paid extra if I sell it now I’d “lose out” What we’d get for it would pay off remaining debt and not leave much for spare anyway to refinance two new cars. Even cheaper ones. I did a whole thing on ChatGPT for calculations.

Already moved out of the mouldy place. RHT pushed on our behalf to get our deposit back due to landlord negligence of maintenance
 
Tomtomtom said:
Tbh if you can't pay down the first car without losing your emergency fund then you should not be looking to buy a second.
Click to expand...
Oh this is the emergency emergency fund. We still have other investments and other emergency funds. This is just the easily accessible ones.
 
PotatoGuardian said:
Oh this is the emergency emergency fund. We still have other investments and other emergency funds. This is just the easily accessible ones.
Click to expand...

Okay then I'm not sure why it would be "risky" to pay down debt on a depreciating asset.

By the exact same token, you don't become a better credit risk (and get lower interest rates) for having more of this kind of debt.
 
PotatoGuardian said:
Worked this out and because I put down a big deposit on the car and paid extra if I sell it now I’d “lose out” What we’d get for it would pay off remaining debt
Click to expand...

I don't see the problem here. I think you've played a trick on yourself where as long as you don't have to actually realise the depreciation, the bank can just keep taking your money.
 
Last edited:
PotatoGuardian said:
Car is financed through Audi financial services (no balloon payment). But with a baby on the way we need to make space for a second car.

Could I approach Wesbank to take over my loan and hopefully they offer a lesser interest rate? Current rate is 12.25%. Excellent credit score etc.

I could just pay the car off but that's risky as it would be a massive savings dump and not sure if that is wise
Click to expand...
I don't know whether they will refinance tbh. 12.25% is highish, but not super high. You might get 0.5% down maybe.
It depends on how much is left on the car, and how much you have in savings.

You can do a third option and just pay off a portion of the debt and capitalise the amount to reduce the monthly payment. I have done this multiple times because of babies as well :p
 
You looking at refinance to maybe save R100 a month with just a rate adjustment (keeping the remaining term in place) or to extend the term over a "fresh" 60/72 months?

The second reasoning is just putting you further down the debt hole and much like financing a balloon at the end of the term.

Take a relook at your monthly budget and prioritize for your needs.
 
PotatoGuardian said:
It was pre-owned and i like the car after driving a Yaris for 10 years. It’s not unaffordable I was just dumb and should have shopped around for a better interest rate
Click to expand...
A cheaper car… you bought a pre-owned Audi… damn.
How are you paying for the expensive repairs
 
Tomtomtom said:
Okay then I'm not sure why it would be "risky" to pay down debt on a depreciating asset.

By the exact same token, you don't become a better credit risk (and get lower interest rates) for having more of this kind of debt.
Click to expand...
Maybe risky was the wrong word but if withdrawing other funds for an emergency would mean paying capital gains tax
 
Tomtomtom said:
I don't see the problem here. I think you've played a trick on yourself where as long as you don't have to actually realise the depreciation, the bank can just keep taking your money.
Click to expand...
Can you explain more about what you mean? do you mean I'm bamboozling myself because the car has depreciated it but if I adjust the loan I'm avoiding that awareness?
 
konfab said:
I don't know whether they will refinance tbh. 12.25% is highish, but not super high. You might get 0.5% down maybe.
It depends on how much is left on the car, and how much you have in savings.

You can do a third option and just pay off a portion of the debt and capitalise the amount to reduce the monthly payment. I have done this multiple times because of babies as well :p
Click to expand...
oh hmmmmmmm this is an interesting option!
 
who on earth has savings when you're burdened with massive debt...

that makes no logical sense

pay off the car and any other expenses, you are losing more than anything. Then decide what you want to do car wise
 
A3@MBB said:
You looking at refinance to maybe save R100 a month with just a rate adjustment (keeping the remaining term in place) or to extend the term over a "fresh" 60/72 months?

The second reasoning is just putting you further down the debt hole and much like financing a balloon at the end of the term.

Take a relook at your monthly budget and prioritize for your needs.
Click to expand...
Valid point thank you. We did have a look at the budget but we don't have much room if we add medical aid costs and other baby needs things.

I should have probably added we aren't living month to month and can still save. We're just "conservative" with money and so trying to see if it made sense to pay the car off or reduce monthly payments etc.

Sucks that we both have to go to the office in different locations
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X