Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • neobrainless
    • By neobrainless 4th Dec 17, 1:15 PM
    • 21Posts
    • 1Thanks
    neobrainless
    Am I missing something about this finance plan?
    • #1
    • 4th Dec 17, 1:15 PM
    Am I missing something about this finance plan? 4th Dec 17 at 1:15 PM
    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!
Page 1
    • Nobbie1967
    • By Nobbie1967 4th Dec 17, 1:54 PM
    • 683 Posts
    • 784 Thanks
    Nobbie1967
    • #2
    • 4th Dec 17, 1:54 PM
    • #2
    • 4th Dec 17, 1:54 PM
    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
    • By GunJack 4th Dec 17, 2:50 PM
    • 9,882 Posts
    • 7,362 Thanks
    GunJack
    • #3
    • 4th Dec 17, 2:50 PM
    • #3
    • 4th Dec 17, 2:50 PM
    ...or start small. If you can manage £500-£1k-ish, is a cheap van outright a better bet until the business gets established?
    ......Gettin' There, Wherever There is......
    • forgotmyname
    • By forgotmyname 4th Dec 17, 2:51 PM
    • 26,230 Posts
    • 10,469 Thanks
    forgotmyname
    • #4
    • 4th Dec 17, 2:51 PM
    • #4
    • 4th Dec 17, 2:51 PM
    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
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
    • neobrainless
    • By neobrainless 4th Dec 17, 4:16 PM
    • 21 Posts
    • 1 Thanks
    neobrainless
    • #5
    • 4th Dec 17, 4:16 PM
    • #5
    • 4th Dec 17, 4:16 PM
    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
    • By wgl2014 4th Dec 17, 4:33 PM
    • 421 Posts
    • 253 Thanks
    wgl2014
    • #6
    • 4th Dec 17, 4:33 PM
    • #6
    • 4th Dec 17, 4:33 PM
    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
    • By forgotmyname 5th Dec 17, 12:25 AM
    • 26,230 Posts
    • 10,469 Thanks
    forgotmyname
    • #7
    • 5th Dec 17, 12:25 AM
    • #7
    • 5th Dec 17, 12:25 AM
    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.
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
    • neobrainless
    • By neobrainless 5th Dec 17, 12:42 AM
    • 21 Posts
    • 1 Thanks
    neobrainless
    • #8
    • 5th Dec 17, 12:42 AM
    • #8
    • 5th Dec 17, 12:42 AM
    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! ��
    • forgotmyname
    • By forgotmyname 5th Dec 17, 3:13 AM
    • 26,230 Posts
    • 10,469 Thanks
    forgotmyname
    • #9
    • 5th Dec 17, 3:13 AM
    • #9
    • 5th Dec 17, 3:13 AM
    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.
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
    • arcon5
    • By arcon5 5th Dec 17, 8:44 AM
    • 13,197 Posts
    • 8,370 Thanks
    arcon5
    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
    • By neobrainless 5th Dec 17, 10:13 AM
    • 21 Posts
    • 1 Thanks
    neobrainless
    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...
    • Car 54
    • By Car 54 5th Dec 17, 10:35 AM
    • 2,460 Posts
    • 1,598 Thanks
    Car 54
    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...
    Originally posted by neobrainless
    In your position - a start-up business - you need to learn quickly about finance. Your knowledge of electric vehicles is irrelevant.

    Your income will vary, especially in the early months and years. Some of your costs will vary with the work (e.g. fuel) but some are fixed (e.g. insurance, loan repayments) and have to be paid whether or not there's money coming in. You should be looking to keep your fixed costs as low as possible, so the guys suggesting a cheap van are right.
    • ciderboy2009
    • By ciderboy2009 5th Dec 17, 10:57 AM
    • 308 Posts
    • 272 Thanks
    ciderboy2009
    part of the plan is to take advantage of Bristol's hippy side by getting an electric van
    Originally posted by neobrainless
    I think you'd do much better by taking advantage of Bristol's 'cheapskate' side which is much bigger than the hippy side and full of people who would be wondering how much the green credentials would be adding on to their bills!

    I'd also be careful about advertising yourself as a "carpenter/odd-jobs type person". If I want a carpenter then I want a specialist - not somebody who just does a bit of carpentry now & then.
    • neobrainless
    • By neobrainless 5th Dec 17, 11:08 AM
    • 21 Posts
    • 1 Thanks
    neobrainless
    I do hit the cheapskate side pretty well for some stuff, and having an electric van would make it CHEAPER to do a lot of services due to next to none existant fuel bills. As stated, the extending mortgage option makes my monthly outgoings lower.

    I don't advertise as carpenter/odd jobs, I was just summarising my business as succinctly as possible for advice purposes.
    • agrinnall
    • By agrinnall 5th Dec 17, 11:39 AM
    • 18,769 Posts
    • 14,478 Thanks
    agrinnall
    I do hit the cheapskate side pretty well for some stuff, and having an electric van would make it CHEAPER to do a lot of services due to next to none existant fuel bills.
    Originally posted by neobrainless
    But you are conveniently ignoring the huge finance costs of a brand new electric van compared to the minimal cost of a cheap banger. You might be a top notch carpenter for all I know, but your financial knowledge is decidedly lacking.
    • neobrainless
    • By neobrainless 5th Dec 17, 12:03 PM
    • 21 Posts
    • 1 Thanks
    neobrainless
    Actually, once you include the large fuel bill and maintenance costs, a cheap van doesn't work out cheaper necessarily, just in up front cost. Once you get past year 4/5 (probably less if I could be bothered to do a more robust calculation) the electric van is MASSIVELY cheaper.
    • Car 54
    • By Car 54 5th Dec 17, 12:16 PM
    • 2,460 Posts
    • 1,598 Thanks
    Car 54
    Actually, once you include the large fuel bill and maintenance costs, a cheap van doesn't work out cheaper necessarily, just in up front cost. Once you get past year 4/5 (probably less if I could be bothered to do a more robust calculation) the electric van is MASSIVELY cheaper.
    Originally posted by neobrainless
    But the odds are against your business lasting five years! http://www.telegraph.co.uk/finance/businessclub/11174584/Half-of-UK-start-ups-fail-within-five-years.html

    And by taking on unnecessary fixed costs you are stacking the odds against you further. (see my post #12)
    • neobrainless
    • By neobrainless 5th Dec 17, 12:20 PM
    • 21 Posts
    • 1 Thanks
    neobrainless
    Maybe so, but 1) if you plan as though your business venture won't last 5 years then you're doomed to fail from the start.
    2) Worst case it fails and then, horror of horrors, I'm left with a vehicle that's extremely cheap to run - doesn't seem like much of a downside to me?
    • ratrace
    • By ratrace 5th Dec 17, 12:30 PM
    • 476 Posts
    • 323 Thanks
    ratrace
    Op, your missing the point you lose a lot money in depreciation let me give you an example of a work mate who was boasting about his nissan leaf

    He bought a nissan leaf for £25,000, two and a half years later he had to sell due to personal circumstances sold it for £9,000 so he lost £16,000 which is around £500+ a month Plus the cost of the electirc he used over them years which was around £1,500 but he just saw the fuel saving and jumped on the bandwagon

    so thats what you are doing you are looking at the saving you can see ie fuel but you are not looking at the overall cost

    I have an astra which costs me around 15p a mile, the nissan leaf example above cost the lad 50p a mile (£16,000+£1,500/30,000 miles driven)

    car dealers are many things but they are not a charity, they are the masters of doing all the calculations long before the sell any car/van

    hope this helps
    People are caught up in an egotistic artificial rat race to display a false image to society. We want the biggest house, fanciest car, and we don't mind paying the sky high mortgage to put up that show. We sacrifice our biggest assets our health and time, We feel happy when we see people look up to us and see how successful we are”

    Rat Race
    • n217970
    • By n217970 5th Dec 17, 12:41 PM
    • 243 Posts
    • 179 Thanks
    n217970
    I have to say I am with the others, certainly to begin with a used older van would be a safer option. You could still hit up the hippies even with a diesel van - go carbon neutral and keep banging on about that or something.

    When working for oneself its important to always have a get out plan. Whenever I take a risk in the business world I always make sure that if it all goes wrong I can dispose of the risk with minimal cost - an amount I am prepared to lose.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,728Posts Today

6,346Users online

Martin's Twitter
  • RT @bearface83: @MartinSLewis check out the @Missguided new 60% off offer. Upping the cost of items almost double to make us think it?s a?

  • RT @efitzpat: Thank you SO SO much @MartinSLewis for your Student Loans refund advice! I just got a grand refunded right before Xmas! Whoop?

  • Have a lovely weekend folks. Don't do anything (fiscally) that I wouldn't do!

  • Follow Martin