Funding a used Car purchase??

hollis1965

Hi, my company has finally given me a car allowance to purchase a used car. I have 10k saved which I was going to use to buy the car outright and then use the allowance to replenish my savings before adding the car purchase price to my mortgage?.

The plan was to decrease my mortgage term to enable me to plough the extra £400 pm off of my mortgage loan giving me lower payments than a loan?

The other option was to take a loan which i did not really want to do?

Please advise as I am very confused??

hollis1965

Thanks for the advice...Do you think that the mortgage idea is a good one?? I figure that I can get a better deal that if I was to enter into a loan for three years??

hollis1965

Sorry if I wasnt clear. I will try again....

I am funding a car purchase. The car has to be of a reasonable standard as I travel approximately 3000 miles per month.

My plan in the short term was to use my 10k savings which I have on deposit instead of opting for a loan over three years.

I was then thinking of increasing my mortgage by the price of the car to give me back an emergency fund and overpaying my mortgage each month with my car allowance. Approx £400 pm

Do you think that this is a sensible option?

Thank you so much for your help, its good to get a second opinion!!

hollis1965

Point taken. I guess that I could just start stashing the car allowance back into an ISA. Do you think that this would be better?

hollis1965

Thanks Loaner,

My job is pretty secure. I have just been promoted and our sales figures are well up on last year (I work in Software)

I do not have any debts apart from the mortgage £130k with my property valued around £390k.

I think that I am just nervous about losing the 10k cushion.

I can see what you mean about the mortgage, good advice thanks:T