Am I missing something about this finance plan?

neobrainless · 4 December 2017 at 2:15PM

Hi,
I've started up as a self-employed carpenter/odd-jobs type person, and have let several jobs go due to not having a van yet. I'm partly waiting to hit the turn-around point on my current car lease (next 2/3 months should get me there), but also I've been trying to get my head around the best way to finance it, as my current income is scarcely consistent, and part of the affordability is unknown extra work from having a van.

My latest idea is to extend my mortgage (or remortgage) to cover the cost outright, as by my calculations this works out cheaper than my current deal per month (and that's the only thing that matters at the moment really), and allows me to over-pay when the extra-work comes in, hopefully still clearing everything in sensible time.

My current LTV is under 60%, so there's plenty of headroom on the mortgage.

Oh, and I'd prefer to buy the van outright as I am not too good at looking after the appearance of vehicles (scratches and mud everywhere), and would rather not have another tied-up 3 years of trying my best to keep it super clean!

Am I crazy? I appreciate to total amount I'll pay long term could end up being more, but my plan is to make over-payments, and last time I was earning enough to have spare cash I was very good at actually doing it, so I'm then just waiting on business picking up...

Cheers!

Nobbie1967 · 4 December 2017 at 2:54PM

My first thought was that you'll find it difficult to get a remortgage since you've just gone self employed and have no track record of income to finance the mortgage.

What about a PCP type deal and put away the extra you make using the van to pay the final payment at the end of the deal and keep the van.

GunJack · 4 December 2017 at 3:50PM

...or start small. If you can manage £500-£1k-ish, is a cheap van outright a better bet until the business gets established?

forgotmyname · 4 December 2017 at 3:51PM

Why not buy something cheap? A few jobs will soon pay for that and then you run it where you only replace the essentials.

Soon have enough to buy a better one and repeat. I would want a builder or carpenter to have a vehicle thats older than me

neobrainless · 4 December 2017 at 5:16PM

Gah, forgot to mention, part of the plan is to take advantage of Bristol's hippy side by getting an electric van - hence aiming high at the start... Can't believe no-one has done a hybrid yet, seems like a no-brainer to me, but there we go...

Thanks for the responses - a cheap short term van is on the cards, just not #1, it's all good food for thought!

wgl2014 · 4 December 2017 at 5:33PM

I'd be wary of taking out a loan or finance based on potentially earning more in the future, if that doesn't work out you could be stuck with unaffordable repayments.

forgotmyname · 5 December 2017 at 1:25AM

An electric van, whoosh and potentially there goes more work because your commute will be 2 hours longer or the jobs are just too far to get to.

neobrainless · 5 December 2017 at 1:42AM

You've clearly not read up on electric vehicle technology - by the time I'll be getting one the range will be increasing, and the current vans have enough range for all the jobs I'd want to take! They're plenty nippy enough, too-I'm not planning on racing! &#55357;&#56859;

forgotmyname · 5 December 2017 at 4:13AM

The range will be increasing in the future yes as with everything, but we are not in the future.

We are in the present day and electric vehicles are still a restriction.

Seems your the one that has not read up on the technology. Unless you know of an all electric transit sized van that will do 350 miles loaded up and then just a quick 10 minute stop to do the same again.

arcon5 · 5 December 2017 at 9:44AM

Having an electric van isn't gonna win you clients.
Lots of people claim to want environmentally friendly all laughing all dancing eco plus loo laa laa until you quote them and they want to save two hundred quid with the next contractor who runs an old but tidy standard white van

neobrainless · 5 December 2017 at 11:13AM

The range of the Nissan e-NV200 is increasing in 2018, around the time I'll be able to ditch my current car, so we're as good as in that future. I never said I needed a Transit - although there are some options even at that size. I wouldn't do more than 100 miles round trip for work, as 50 miles around Bristol had plenty of work. Even if I did want to go further, you only need 30 minutes to fast charge.

There's plenty of people in Bristol who would love to be able to choose an electric vehicle if given the choice, the problem is that the people offering 'man with van' type services at the moment are stuck in the past.

I've actually thought about this a lot, and know a lot about electric vehicles. The only thing I'm not sure about is financing...

Am I missing something about this finance plan?

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