How to finance a car?
Discussion
Hello all,
I’m after some advice about financing a car. First, a little back ground, this is something I have never done and hoped I would never have to but due to an unexpected change in job we now need a second car as I’ll be driving to work and not using the train. We currently have a Golf which we will keep and I’ll use for my commute. This means my fiancée will need a car. Also, this does not have to be a quick decision as we will be borrowing a car until the end of the year.
As we will be buying used and we are looking at possible getting an S2000 we would need around 8K which we could pay off in 2 years so I think that a loan around 8/9% is the way to go. I see this as a good chance to by a fun car and not another golf etc.
Are there any other ways in which to by a car? I guess with a garage you need a 3K deposit or something otherwise they might want a higher % and the cash will be with the car so not really a chance to sell if we needed to.
Basically, is a personal loan the way to go for an 8K loan?
I’m after some advice about financing a car. First, a little back ground, this is something I have never done and hoped I would never have to but due to an unexpected change in job we now need a second car as I’ll be driving to work and not using the train. We currently have a Golf which we will keep and I’ll use for my commute. This means my fiancée will need a car. Also, this does not have to be a quick decision as we will be borrowing a car until the end of the year.
As we will be buying used and we are looking at possible getting an S2000 we would need around 8K which we could pay off in 2 years so I think that a loan around 8/9% is the way to go. I see this as a good chance to by a fun car and not another golf etc.
Are there any other ways in which to by a car? I guess with a garage you need a 3K deposit or something otherwise they might want a higher % and the cash will be with the car so not really a chance to sell if we needed to.
Basically, is a personal loan the way to go for an 8K loan?
0% credit cards.
http://www.moneysavingexpert.com/cards/balance-tra...
A few out there do 0% for 12-16 months with a 3% upfront fee.
Some let you balance xfer from your bank account (virgin did for me). If not balance xfer from card to existing card then get them to sent you a cheque.
You then just DD the min payment each month - make sure you've saved enough to pay it off at the end of the 0% period (or have another 0% card lined up to balance xfer) as the standard rates will rape you.
http://www.moneysavingexpert.com/cards/balance-tra...
A few out there do 0% for 12-16 months with a 3% upfront fee.
Some let you balance xfer from your bank account (virgin did for me). If not balance xfer from card to existing card then get them to sent you a cheque.
You then just DD the min payment each month - make sure you've saved enough to pay it off at the end of the 0% period (or have another 0% card lined up to balance xfer) as the standard rates will rape you.
For an £8k loan at 7.7% (nationwide) over 24 months you will pay total £657 interest.
If you do it on 0% cards then RBS are doing 0% for 16 months with 2.9% fee = cost £232. If you then don't manage to repay it all within 16 months, get another 0% card for the ~£2.5k you will have owe after 16 months. Another 0% card (e.g. barclaycard) is another 2.9% of £2.5k to pay = £72.50
So the total cost of the 24 months "loan" on 0% cards is £304.50 which is £352.50 cheaper than the personal loan method and will pay most of your roadtax for the S2000 over that period....
I'm not a financial advisor and am in no way qualified to dish out advice but this is the way I would do it....
If you do it on 0% cards then RBS are doing 0% for 16 months with 2.9% fee = cost £232. If you then don't manage to repay it all within 16 months, get another 0% card for the ~£2.5k you will have owe after 16 months. Another 0% card (e.g. barclaycard) is another 2.9% of £2.5k to pay = £72.50
So the total cost of the 24 months "loan" on 0% cards is £304.50 which is £352.50 cheaper than the personal loan method and will pay most of your roadtax for the S2000 over that period....
I'm not a financial advisor and am in no way qualified to dish out advice but this is the way I would do it....
Gassing Station | Finance | Top of Page | What's New | My Stuff