Car finance advice.
Discussion
Hi, after advice regards car finance.
I know people will say its the devil but I currently own two cars outright, one diesel daily and one toy (a '98 Audi S4). As much as i like both cars, both cars are at the age and mileage where they require constant maintenence and repairs, and I'm looking to downsize to one 'do it all' car, preferably with a warranty and relatively new, hence looking towards car finance and buying from a dealer.
For once, I don't need advice on what car to buy, but whether this would be a mistake!
I'm looking to spend approximately 6-8k and over no more than 4 years. I would probably trade in the S4 if it doesn't sell soon so I'd have at least £1500 as a deposit I guess. I'm aiming to keep payments around, or under £200 a month. Does this sound about right? Or should I budget for spending less?
Last question, approximately 18 months, 2 years ago my credit rating wasn't great, nothing terrible just a few missed bills here and there. No debt collectors and CCJ's, far from it!! Since then I've cleared my overdraft, paid off and controlled spending on my credit card and I am financially secure for the position I'm in, with very minimal debt on my credit card being my only debt. Will my past mistakes make car finance unobtainable? My monthly take home pay is around £1350-1400, and I still live at home, so I wouldn't feel £200 car finance is living beyond my means?
Any advice would be fantastic.
Regards,
Liam
I know people will say its the devil but I currently own two cars outright, one diesel daily and one toy (a '98 Audi S4). As much as i like both cars, both cars are at the age and mileage where they require constant maintenence and repairs, and I'm looking to downsize to one 'do it all' car, preferably with a warranty and relatively new, hence looking towards car finance and buying from a dealer.
For once, I don't need advice on what car to buy, but whether this would be a mistake!
I'm looking to spend approximately 6-8k and over no more than 4 years. I would probably trade in the S4 if it doesn't sell soon so I'd have at least £1500 as a deposit I guess. I'm aiming to keep payments around, or under £200 a month. Does this sound about right? Or should I budget for spending less?
Last question, approximately 18 months, 2 years ago my credit rating wasn't great, nothing terrible just a few missed bills here and there. No debt collectors and CCJ's, far from it!! Since then I've cleared my overdraft, paid off and controlled spending on my credit card and I am financially secure for the position I'm in, with very minimal debt on my credit card being my only debt. Will my past mistakes make car finance unobtainable? My monthly take home pay is around £1350-1400, and I still live at home, so I wouldn't feel £200 car finance is living beyond my means?
Any advice would be fantastic.
Regards,
Liam
Others can advise on current finance rates but in order to give an intelligent view on whether £200 is "too much" or not - it would be helpful to know more about your outgoings and plans...
e.g.
saving for a house deposit?
credit card debt?
overdraft?
rent contribution to parents?
food?
bills?
petrol/insurance/tax?
in particular do you intend on moving out during the 4 years in question or at the end...
you will obviously need a deposit at that point and good credit will help for future landlords...
bangernomics works up until the bangers start failing too much - at that point you need to buy a different more reliable banger but the jump to an almost new car is EXPENSIVE simply because the real cost of depreciation hurts!
e.g.
saving for a house deposit?
credit card debt?
overdraft?
rent contribution to parents?
food?
bills?
petrol/insurance/tax?
in particular do you intend on moving out during the 4 years in question or at the end...
you will obviously need a deposit at that point and good credit will help for future landlords...
bangernomics works up until the bangers start failing too much - at that point you need to buy a different more reliable banger but the jump to an almost new car is EXPENSIVE simply because the real cost of depreciation hurts!
Sorry I should have put disposable income really, which after, fuel, food, couple of bills, lump off my credit card and rent to my dad, is around £800.
I do spend quite a bit of my disposable income on car maintenence, fuel in the *toy*, going to car shows/meets and the usual going out with the mrs. Before I bought the S4 I was saving £500 a month of my disposable income to buy that car.
I am slightly lucky in the house situation so it's not something I need to think about.
As far as depreciation goes I'm looking at a hot hatch about 5/6 years old so depreciation won't be too steep, the maintenence bills won't be as horrific as the S4, nor will the fuel and insurance bill for 2 cars, if anything major goes wrong ill have a warranty for a while, rather than the scary engine out repairs on the S4!
I've never had a newish car, and would like to treat myself to something nice before I have to grow up!
I do spend quite a bit of my disposable income on car maintenence, fuel in the *toy*, going to car shows/meets and the usual going out with the mrs. Before I bought the S4 I was saving £500 a month of my disposable income to buy that car.
I am slightly lucky in the house situation so it's not something I need to think about.
As far as depreciation goes I'm looking at a hot hatch about 5/6 years old so depreciation won't be too steep, the maintenence bills won't be as horrific as the S4, nor will the fuel and insurance bill for 2 cars, if anything major goes wrong ill have a warranty for a while, rather than the scary engine out repairs on the S4!
I've never had a newish car, and would like to treat myself to something nice before I have to grow up!
I did something similar, sold the car and got a bike on finance, similar price (£6,000).
Its worked out pretty well for me, its 0% interest for the three years and repayments are £125 a month (£1,500 deposit). It is paying for itself for me, fuel bills were £300 a month, its now £70.
Is your job secure? Thats the one thing I was worried about when taking it out, but I've been at my current company for nearly six years, so should be safe!
Credit rating, no idea what mine was, but in the past I had a mobile phone contact (since 2009ish), and overdraft (paid off around a year before) and a credit card with a £2,000 limit, I've not missed any payments for either the overdraft or credit card.
I wasn't too sure if I would be able to get finance either, but got it without any problems (bit scary that it only took 30ish minutes!).
Its worked out pretty well for me, its 0% interest for the three years and repayments are £125 a month (£1,500 deposit). It is paying for itself for me, fuel bills were £300 a month, its now £70.
Is your job secure? Thats the one thing I was worried about when taking it out, but I've been at my current company for nearly six years, so should be safe!
Credit rating, no idea what mine was, but in the past I had a mobile phone contact (since 2009ish), and overdraft (paid off around a year before) and a credit card with a £2,000 limit, I've not missed any payments for either the overdraft or credit card.
I wasn't too sure if I would be able to get finance either, but got it without any problems (bit scary that it only took 30ish minutes!).
Job is below average pay but local and safe for the next 23 years unless I make a big mistake so that isn't a concern thankfully.
I'm usually rather against finance, I like saving up for things and the feeling you have when you've saved up for months to finally get something you want, but when it comes to spending a lot of money, finance has to be the way forward as long as I live within my means. If I was sticking a huge deposit down and then 500pcm payments then I'd fully expect to be called an idiot.
I'm usually rather against finance, I like saving up for things and the feeling you have when you've saved up for months to finally get something you want, but when it comes to spending a lot of money, finance has to be the way forward as long as I live within my means. If I was sticking a huge deposit down and then 500pcm payments then I'd fully expect to be called an idiot.
you can get a free credit report from
http://www.uk.experian.com/
Just don't forget to cancel your subscription before the 30 days are up.
It should give you an idea, but the only way to know for sure is to apply for the car loan.
http://www.uk.experian.com/
Just don't forget to cancel your subscription before the 30 days are up.
It should give you an idea, but the only way to know for sure is to apply for the car loan.
Sounds like you are FLUSH!
I am sure <£200 would be easy.
Nevertheless IMHO 4 years is a long time to have that debt hanging over you.
Knowing me, I get bored of a car after 1-2 years.
Why not pay it off quicker and maybe try to get a slightly bigger deposit.
You could always try to see just how much you can save over a few months.
Sell the S4 - save £500 for 3 months and then reward yourself with the newer car with only £3k debt on it...
Otherwise the instant gratification spiral is hard to break away from.
Right now you can "afford" the car - sure.
But how much more satisfying would it be to truly earn it!
I am sure <£200 would be easy.
Nevertheless IMHO 4 years is a long time to have that debt hanging over you.
Knowing me, I get bored of a car after 1-2 years.
Why not pay it off quicker and maybe try to get a slightly bigger deposit.
You could always try to see just how much you can save over a few months.
Sell the S4 - save £500 for 3 months and then reward yourself with the newer car with only £3k debt on it...
Otherwise the instant gratification spiral is hard to break away from.
Right now you can "afford" the car - sure.
But how much more satisfying would it be to truly earn it!
walm said:
Sounds like you are FLUSH!
I am sure <£200 would be easy.
Nevertheless IMHO 4 years is a long time to have that debt hanging over you.
Knowing me, I get bored of a car after 1-2 years.
Why not pay it off quicker and maybe try to get a slightly bigger deposit.
You could always try to see just how much you can save over a few months.
Sell the S4 - save £500 for 3 months and then reward yourself with the newer car with only £3k debt on it...
Otherwise the instant gratification spiral is hard to break away from.
Right now you can "afford" the car - sure.
But how much more satisfying would it be to truly earn it!
Not flush at all. Just an average person in an average job.I am sure <£200 would be easy.
Nevertheless IMHO 4 years is a long time to have that debt hanging over you.
Knowing me, I get bored of a car after 1-2 years.
Why not pay it off quicker and maybe try to get a slightly bigger deposit.
You could always try to see just how much you can save over a few months.
Sell the S4 - save £500 for 3 months and then reward yourself with the newer car with only £3k debt on it...
Otherwise the instant gratification spiral is hard to break away from.
Right now you can "afford" the car - sure.
But how much more satisfying would it be to truly earn it!
I am the same, constantly chopping and changing cars and in the process losing money! Like I said, I wouldn't want to pay it over more than 4 years, 3 would be ideal.
The S4 is proving a tricky one to sell, so I thought trade it in, plus a little cash on the deposit and hopefully on an 8k car I might only be financing 5.5k. Which I think is manageable?
Don't get me wrong, I could save up, realistically it would take a year or so of staying in and no luxuries, not seeing my friends much and not doing much with my mrs! Although nice at the end, I may go mental in the mean time!
walm said:
Nevertheless IMHO 4 years is a long time to have that debt hanging over you.
Knowing me, I get bored of a car after 1-2 years.
Why not pay it off quicker and maybe try to get a slightly bigger deposit.
IMHO a HP or PCP agreement might work there, as you can hand the car back once you've paid off set amounts Knowing me, I get bored of a car after 1-2 years.
Why not pay it off quicker and maybe try to get a slightly bigger deposit.
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