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  • FIRST POST
    • MatthewAinsworth
    • By MatthewAinsworth 4th Jan 18, 10:40 PM
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    MatthewAinsworth
    Finance options for 13 year old banger
    • #1
    • 4th Jan 18, 10:40 PM
    Finance options for 13 year old banger 4th Jan 18 at 10:40 PM
    Hi everyone

    I own outright a 13 year old hatchback, middle of the 1.0l range
    Do you know what my finance options are or where I could go for a secured loan on it? I'd like to make a pension topup. I expect that because it depreciates slower than a new car it must be better security for what I do borrow

    Thank you in advance
Page 3
    • MatthewAinsworth
    • By MatthewAinsworth 5th Jan 18, 5:17 PM
    • 3,011 Posts
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    MatthewAinsworth
    Mercdriver - I made about 18% since I started, learning from the Monevator blog
    I didn't realise how expensive logbook loans were and I was only looking into my options for pushing this further, like I said I would never borrow at a higher rate than I expect to get, I won't even take out a margin loan at 8% because I don't want the investment marked to market (they would sell it if your deposit drops too low for the loan- aka a margin call) - I have successfully used 0% credit cards to do it and made about £200 but it hasn't done any favours for my credit rating so I'm winding that down.

    A margin loan doesn't go on your credit record and I didn't know if car finance would

    I fully expect a crash at some point soon but don't believe in market timing, I have emergency funds as well as income and can wait out the next crash for however long it takes to recover. I wouldn't take out credit I couldn't afford - although like anyone with a mortgage I can't go without a job forever if I lost it, however I expect to find a job that pays just enough quite quickly if I needed to, I'd use agencies to get started quickly if that happened

    I reckon that equities dividends is more secure than jobs income because it's spread over many more companies, so by increasing my investment in reducing my overall risk, especially long term
    • qwert yuiop
    • By qwert yuiop 5th Jan 18, 5:43 PM
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    qwert yuiop
    Both parts are just not true. We're straying away from cars here but there have been drops over the last few years but recovered again very quickly. It's also untrue that a lot of funds never make anything. Can you provide any evidence or links for your claim?


    Of course there will be, that's the nature of investing. That doesn't mean you'll lose money - just that the value might be lower at certain points. Even with a massive crash like 2008/9 the markets had recovered within 2 years
    Originally posted by jimjames
    And indeed that’s why it’s a better idea to buy when there’s been a dive rather than the reasonably steady rise since (apart from brexit vote). Failing funds close quite often. I’m sure some of you remember a prizewinning investor pharmacist who launched a fund some years back. It’s recently shut down after several years of heavy losses - in a rising market.

    Anyway, the idea of using a log book loan to invest on the stock market is a test failure that will never get into gear.
    Last edited by qwert yuiop; 05-01-2018 at 5:46 PM.
    “What means that trump?” Timon of Athens by William Shakespeare
    • MatthewAinsworth
    • By MatthewAinsworth 5th Jan 18, 6:02 PM
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    • 1,193 Thanks
    MatthewAinsworth
    Qwertyuiop - waiting for a crash is generally not recommended as we've been waiting for a crash for years, by which time when it does crash it will probably be at a higher price than today. Market timing has a bad record, even computers can't do it

    The funds you mention closing sound actively managed, I can't see how an index fund would close as they're liquid, unleveraged, and the fund itself doesnt care about performance as long as its tracking error is low

    I accept that it'd be very difficult to find an acceptable car loan for this purpose, just an idea
    • jimjames
    • By jimjames 5th Jan 18, 6:36 PM
    • 12,329 Posts
    • 10,909 Thanks
    jimjames
    Anyway, the idea of using a log book loan to invest on the stock market is a test failure that will never get into gear.
    Originally posted by qwert yuiop
    I certainly agree with that bit. But maybe another way of looking at it is that you run an older car rather than spending all your money on brand new PCP and can invest the difference instead

    I accept that it'd be very difficult to find an acceptable car loan for this purpose, just an idea
    Originally posted by MatthewAinsworth
    Let's face it £200 one off from a banger is neither here nor there. But if you put the £250 per month that you might other wise spend on a PCP new car then that would make a very significant sum over time. Even £50 per month increasing by inflation will give you £46k with compounded growth over 20 years. The whole £250 per month for 20 years would give over £232k. Some difference compared to having no car at the end of 20 years because you paid PCP the whole time.
    Last edited by jimjames; 05-01-2018 at 6:43 PM.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • Car 54
    • By Car 54 5th Jan 18, 8:25 PM
    • 2,531 Posts
    • 1,647 Thanks
    Car 54
    I may be wrong but ...

    On the one hand, the OP is displaying some (apparently) quite sophisticated knowledge of stock market investments etc.

    On the other, he drives a £500 banger and is asking frankly dumb questions about bottom-of-the-market loans.

    It doesn't quite add up.
    • MatthewAinsworth
    • By MatthewAinsworth 5th Jan 18, 8:42 PM
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    MatthewAinsworth
    Car54 - I see bangers as the smart choice financially because:
    1- they don't depreciate anywhere near as much, no more than their £500 value in a year
    2 - they don't have anywhere near as much "opportunity cost" - the profit you would make had you invested the money that is tied up in a car - even if all you did was pay down the mortgage or a savings account, you can see that an appreciating asset is better than a depreciating one
    3 - the repair costs if a banger will never be above its value unless you decide to do a big job that'll last a few years
    4- you won't be paranoid about someone damaging the pile of cash you have sitting out there that you can't really protect (and that insurance won't pay you fairly for)
    5 - if it breaks down the short time I'd use busses and taxis won't be hugely significant compared to the costs of a newer car

    To me buying an expensive car is like buying a jewel encrusted screwdriver - it's a tool, I don't highly regard people's decision to buy new cars, but I'm grateful that they do to keep the supply of 2nd hand cars going, and because car dealerships and manufacturers are surely somewhere in my investment

    You'll find a lot of people who do well investing find it hard to ever learn to spend because they're so used to a miserly life
    • seatbeltnoob
    • By seatbeltnoob 5th Jan 18, 10:31 PM
    • 286 Posts
    • 71 Thanks
    seatbeltnoob
    Isn't it 51% of all successful applications have to get this rate?
    Originally posted by worried jim
    hmm maybe they give that rate out to the smaller loans for tiny amounts.
    • forgotmyname
    • By forgotmyname 6th Jan 18, 12:16 AM
    • 26,405 Posts
    • 10,551 Thanks
    forgotmyname
    Has anyone mentioned selling the parts of the cat you dont need?

    Do you need those rear seats and door trims? Stick them on ebay

    I could prove some of your 1 - 5 theories wrong.

    Only depreciates £500 yes but what about repairs? I bought a British Classic for £800 then spent another £1600 and then another £400 or so + MOT and servicing and then traded it in for a proper car worth £1000 ish.

    Dont buy old British Classics . Well not if you dont want to make yet another shopping list of what went wrong on this journey
    Last edited by forgotmyname; 06-01-2018 at 12:24 AM.
    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.
    • Mercdriver
    • By Mercdriver 6th Jan 18, 12:21 AM
    • 1,495 Posts
    • 1,017 Thanks
    Mercdriver
    Has anyone mentioned selling the parts of the cat you dont need?
    Originally posted by forgotmyname
    Which bits do you think Tiddles can live without
    Last edited by Mercdriver; 06-01-2018 at 12:33 AM.
    • MatthewAinsworth
    • By MatthewAinsworth 6th Jan 18, 6:04 AM
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    MatthewAinsworth
    Forgotmyname - if the repair was that expensive, unless you expected the repairs to give you 4 years extra driving they didn't make sense, that's when you scrap and buy another banger
    • qwert yuiop
    • By qwert yuiop 6th Jan 18, 9:23 AM
    • 2,180 Posts
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    qwert yuiop
    Which bits do you think Tiddles can live without
    Originally posted by Mercdriver
    My neighbour’s Manx cat seems healthy.
    “What means that trump?” Timon of Athens by William Shakespeare
    • jimjames
    • By jimjames 6th Jan 18, 10:39 AM
    • 12,329 Posts
    • 10,909 Thanks
    jimjames
    I may be wrong but ...

    On the one hand, the OP is displaying some (apparently) quite sophisticated knowledge of stock market investments etc.

    On the other, he drives a £500 banger and is asking frankly dumb questions about bottom-of-the-market loans.

    It doesn't quite add up.
    Originally posted by Car 54
    I guess it depends if you take the loan question at face value or think there is more to it - a wind up or some revelation to come...
    Remember the saying: if it looks too good to be true it almost certainly is.
    • AdrianC
    • By AdrianC 6th Jan 18, 10:54 AM
    • 16,068 Posts
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    AdrianC
    If the question is "straight", then it seems to be one of those "knows the price of everything, value of nothing" situations.
    • MatthewAinsworth
    • By MatthewAinsworth 6th Jan 18, 10:56 AM
    • 3,011 Posts
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    MatthewAinsworth
    .I guess it depends if you take the loan question at face value or think there is more to it - a wind up or some revelation to come...
    I like to keep you all on your toes, or shall we say, FTSE's
    • qwert yuiop
    • By qwert yuiop 6th Jan 18, 2:02 PM
    • 2,180 Posts
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    qwert yuiop
    I suspect you’re the one on the PCP.
    “What means that trump?” Timon of Athens by William Shakespeare
    • qwert yuiop
    • By qwert yuiop 6th Jan 18, 6:44 PM
    • 2,180 Posts
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    qwert yuiop
    If you don’t pay, they take your car, but do they pursue you for any outstanding money? Is it not like pawning, where it’s the pawn shop taking the risk? In which case, it shouldn’t alter your credit rating.
    Originally posted by qwert yuiop
    Just checked that - if they sell your car and the price falls short of money owed, they will pursue you for the difference. That makes it more like a mortgage than a pawn. You might be better off digging out your broken electric guitar or sovereign ring, which seem to be the only items ever for sale in the window of my local three ball merchant. Oh - and an Amstrad computer that’s been there for years, and probably will be for a while more. The plug at the end of its cable might be useful.
    Last edited by qwert yuiop; 06-01-2018 at 9:50 PM.
    “What means that trump?” Timon of Athens by William Shakespeare
    • Graham_Devon
    • By Graham_Devon 7th Jan 18, 9:16 AM
    • 53,031 Posts
    • 114,376 Thanks
    Graham_Devon
    Forgotmyname - if the repair was that expensive, unless you expected the repairs to give you 4 years extra driving they didn't make sense, that's when you scrap and buy another banger
    Originally posted by MatthewAinsworth
    Not if you have a secured loan on it you can't...

    Not intending to be an insult, but I've never read such a detailed plan which ignores so many basic issues!
    • MatthewAinsworth
    • By MatthewAinsworth 7th Jan 18, 9:38 AM
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    MatthewAinsworth
    Graham - because it'd be basically stoozed the loan could be quickly redeemed before scrapping, although there is risk in the markets, this is something cash reserves could cover perhaps
    • AdrianC
    • By AdrianC 7th Jan 18, 9:42 AM
    • 16,068 Posts
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    AdrianC
    If you can quickly cover the three-figure loan, then why do you need it in the first place?
    • MatthewAinsworth
    • By MatthewAinsworth 7th Jan 18, 10:19 AM
    • 3,011 Posts
    • 1,193 Thanks
    MatthewAinsworth
    Adrian- it liberates cash reserves to be invested. All investors need to keep some emergency cash, so by taking loans you have more than that amount and can invest the rest
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