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Car finance / Loans

Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
Ok so with my test in 6days time we are looking at getting a car, we would prefer to spend 4-5,000 on a newish (few years old) second hand car, only trouble is, we are not sure which way to go about financing it.

first off, if we can we want to go down the route of 0% interest from a dealer if we can for 2/3years. and try and pay it off within two years,

second route would be a loan, obviously again only over 2/3 years for a small amount around 5grand, which is the best route to do this? good providers etc, i mean im only earning 14,000 a year, (even though tax credits adds another 6,000) will we have problems getting a loan for this amount over a couple of years?

help please, i've never dealt with this before. atm we have no outstanding debts and good credit, good monthly income and little out going (bank balence always seems to be in credit at the end of the month)

Comments

  • PearlyPearly ********* Posts: 345 The Mix Regular
    Hiya,

    I remember when I bought my car six years ago I got it on finance (with no deal to do 0% finance) and so after two years it ended up being saving me money to get a loan to pay the car finance deal off and then pay the loan off separately as it was a lower rate. On a separate not, having bought a brand new car I would say you are definitely right to get a second hand one as the price goes down so much after just a couple of years! It's hard to say if you will manage to get a loan, but many places do offer loans to people with low salaries or even bad credit ratings, just beware of the small print and high interest rates. It may end up being better to save up for a year or so and buy one that is five years old or so, as they are so much cheaper and if you go for that 'certain' reliable car, not mentioning any brands, it will last you for years!

    We are due to publish a new article on buying second hand cars, but in the meantime check out this article from our partner CAB:

    Buying secondhand cars


    Not sure if that helps at all, but good luck with the test and hope you manage to get a car soon.

    Pearly
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    You're male right? If so have you looked into how much its going to cost to insure a £5k car? I can only assume you are looking at something reasonably flash, perhaps something quite fast?

    I'd suggest you save your money and just get a second hand fiesta, in good nick they will run and run, use very little petrol and are reasonably cheap to insure.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Agree with Budda, just looked at your profile and you're 20? Get a cheap car with a small engine otherwise you'll end up taking out a loan just for the insurance :p
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    A little off topic but there is a 17 year old in the paper in a town near me that has just won £400,000 on the lottery and has just bought a £40,000 Audi RS4. I would love to know how much the insurance is costing him!
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    squeal wrote: »
    A little off topic but there is a 17 year old in the paper in a town near me that has just won £400,000 on the lottery and has just bought a £40,000 Audi RS4. I would love to know how much the insurance is costing him!

    LOL!! Probably not much less than the cost of the car, I would imagine ;)

    Seriously, you can probably count the number of days before he crashes it on one hand.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    g_angel wrote: »
    LOL!! Probably not much less than the cost of the car, I would imagine ;)

    Seriously, you can probably count the number of days before he crashes it on one hand.

    thats a bit harse really, he could be a very good driver, just because his young and has a nice car doesnt mean he will crash
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Territt wrote: »
    thats a bit harse really, he could be a very good driver, just because his young and has a nice car doesnt mean he will crash

    Heh, harsh, but as a crass generalisation, probably more than accurate enough.

    414bhp + 17 years old is not a good mix ;)
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    g_angel wrote: »
    Heh, harsh, but as a crass generalisation, probably more than accurate enough.

    414bhp + 17 years old is not a good mix ;)

    I dont see how generalisation seems to be ok when it comes to young people,
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Territt wrote: »
    I dont see how generalisation seems to be ok when it comes to young people,

    Boo hoo.

    I did say it was crass...
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    budda wrote: »
    You're male right? If so have you looked into how much its going to cost to insure a £5k car? I can only assume you are looking at something reasonably flash, perhaps something quite fast?

    I'd suggest you save your money and just get a second hand fiesta, in good nick they will run and run, use very little petrol and are reasonably cheap to insure.
    no actually, im looking at either a small engine fiesta or corsa, a family car about 3-5years old 1.2 engine due to insurence, fully comp about 800-850per year, with £200 excess and curtosey car/breakdown cover

    If it was just for myself, i would buy a heap of crap for a couple of years, since it is for my family, partner and son i dont trust heaps of crap and would prefer a good (if more expensive) reliable car with good safety features.

    ETA = after looking at some cars we will prob go for a Toyota Yaris, probably least racing car ever
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    However you do it, make sure you read the paperwork properly..

    I passed my test a few days after my 21st and a few days later toddled off to Carcraft - sucked in by the "drive away the same day" thing. Thinking I was big and clever, I didn't take my Dad with me when I signed the paperwork and only gave it a quick glance, trusting what the smiley salesman was telling me. I bought a £6k Fiesta with £1k deposit and £5k on their finance.... that £5k would have cost me over £11k to pay back, all in all! :o

    I realised later in the day and ran crying to my Dad, all sorry for myself. Luckily, there was a 14 day cooling off period (not sure if there legally has to be) and I was employed fulltime with little outgoings so was approved for a £5.5k personal loan from my bank (Nationwide) at 6.7% which I paid off the finance arrangement, plus their fees (hence the extra £500) with. That's costing me approx. £900 in interest to pay back over five years (three and a bit years in now), which is a damn sight better than £6k!

    Unfortunately, I don't think personal loan rates are as low as 6.7% these days. Try searching on moneysupermarket or moneysavingexpert for the best deals.
  • littlemissylittlemissy knit chick Posts: 9,972
    I heart my Yaris. It goes from 0-60 in about 3 minutes. But I love it.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    You may not get 0% deals in the current climate. Depends of course on how eager they are to sell you a vehicle, and where you go.

    0% will still cost you 210 quid a month to pay evenly over 24 months, do you have that cash spare? If not then you may end up paying a bit more. Also generally for most 0% deals you have to put down a deposit. Also a lot of dealer 0% offers are only on brand new cars.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    squeal wrote: »
    A little off topic but there is a 17 year old in the paper in a town near me that has just won £400,000 on the lottery and has just bought a £40,000 Audi RS4. I would love to know how much the insurance is costing him!


    He's probably driving without insurance, like a lot of rich people with expensive cars do.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Probably around £800-1000 towards a deposit.

    I can get a loan from my bank at around 9-10% APR over 36months it means paying back a wee bit eg £800ish in interest, not too bad i dont think anyway for what i earn etc. will do some hunting around
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