SiDHEaD

I'll shut up one day, honest

When making an early settlement payment on car finance, do they work out the interest going on the time you've had the car, or the amount that WOULD be payable if you went to the end of the terms?

MarkO

Usually they recalculate so that you're not paying interest for the period after you've cleared the debt. Some more dubious ones might not, though.

Best thing to do is ask for a current 'balance' of what's outstanding, and arrange to pay that off. Then when you get the actual settlement figure you'll get a pleasant surprise when the amount turns out to be smaller.

marty_t3

I cleared off my last car finance early and didn't have to pay the remaining interest. There was however a charge for administration. It still worked out cheaper paying it off early though.

SiDHEaD

I've got my Zetec-S on finance, but my dad has offered to pay me enough to cover what (i think) is left on the finance, so that I can buy a Scoob. Just tryin to work out whether its best to buy a Scoob with his cash, or settle the finance, and attempt to get finance from Subaru. This way I will get a better car, but will be stuck to finance for a few more years!

The original finance is in his name anyway, as I had only been in my job a few months, so I dont think not settling it will cause any problems...

Andy