What are my chances on a loan/PCP for a car?
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I don't know if you're factoring in the deposit for the next purchase? You have a healthy deposit this time but in three years, to get cheap monthly payments you'll need another deposit which some people don't account for. I've a few friends that have gone in to buy a second hand car then persuaded to go PCP instead as it looks a similar cost for a new car but then on checking the figures before signing up they've realised they wouldn't have the deposit the second time (in their case their existing car would be the deposit the first time) so it actually worked out a lot more expensive than expected.
You can prepare for unexpected charges by setting a small amount of money aside each month so you've the money there if needed and still there if you don't need it while the depreciation is guaranteed to cost you each month which is a substantial sum of money.
John0 -
Big thanks to everyone who has contributed. It definitely did help.
The happy ending to the story is I decided to go down the hire purchase route. It'll cost me £190 for three years. Given that this is pretty low, I'll be able to tuck away some savings each year and overpay to dramatically kill off the amount I'd owe in interest. I'm also happy with the fact I'll have ownership of the car, rather than the dreaded cycle of PCP. The more I think of PCP, the more I'm so glad that I've avoided a potential catastrophe.
Of course, I was absolutely dreading to hear the results of the finance company when I went ahead to buy the car... but I sailed through it and they accepted me within 10 minutes of putting the details through. No credit history is better than a bad history. This hire purchase is now going to work wonders on the credit history too..something I very much need for my future when it comes to a mortgage. As a side note, I did also put a 5k deposit down which did help in terms of financing the car.0 -
Don't know if it is helpful at all but I have just been approved PCP through BMW Finance with no problems and I do not have a perfect credit history (I have a settled defaulted account from 4 years ago and 2 missed payments from an account around 2 years ago), my credit score on Experian is 787 (not sure if the 'score' even means anything, but it sits bang in the 'fair' section). However, although I do not have a perfect credit rating, I have borrowed a lot and paid it all back over the years (the sales man said apparently they prefer people who borrow and pay back as I am the type of person they want to lend to). I put a £2k deposit down on a £13,500 car. I was honest with the dealership when I went in and said I am unsure if I will be approved, so your best bet is to be honest about your situation as I think they would help you if you outright lay it on the table. At the end of the day, the dealership want's to make a sale, so they will help you! Just go in and try, I wouldn't worry about an application on your credit file as it's only one.0
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