Loan Time

flyingscotno1

I'm buying a car and have paid a deposit on it. Need to start the processes to get a loan and get back to the dealer before he gets annoyed at me and flogs it to someone else!

I have been offered dealer finance but it is about £70-80 more expensive than headline rates around.

How is the postal strike going to affect me if I apply to Tesco etc? Am I better simply taking to the bank direct rather than dealing with Tesco, I have concerns that it would be posting loan application papers, posting back, wanting statements/wageslips and with the post being up the spout that this could take weeks I don't have. Might be simpler to deal with the banks? Anyone any advice?

[Deleted User]

The postal strike and the strike next week will disrupt such things and theres not much can be done about that,although I read somewhere that"specail delivery"mail even during a strike gets priority,and once agreed that money can be paid direct to your account(usually for a fee).I`m puzzled that you would pay a deposit before getting the finance in place??

flyingscotno1

woodbine wrote: »

The postal strike and the strike next week will disrupt such things and theres not much can be done about that,although I read somewhere that"specail delivery"mail even during a strike gets priority,and once agreed that money can be paid direct to your account(usually for a fee).I`m puzzled that you would pay a deposit before getting the finance in place??

Yes, I guess the strike will just hold things up, not much can be done other than avoiding post as much as possible.

I don't think it is unusual to pay a deposit before finance was arranged for a used vehicle- the deposit is simply so the dealer takes a price off the windscreen for a new car however I'd agree. I didn't want to take an unknown amount out in a loan just in case the right car turned up! In essence I don't actually need finance for the vehicle, I could afford it with my ISA, but I think financing makes more sense- it is just sorting out the odds and ends and typically it is in a postal strike.

Just need to see who to try for the loan. Might try the banks with good rates for existing customers which might help rather than worry about the post.

CLAPTON

flyingscotno1 wrote: »

Yes, I guess the strike will just hold things up, not much can be done other than avoiding post as much as possible.

I don't think it is unusual to pay a deposit before finance was arranged for a used vehicle- the deposit is simply so the dealer takes a price off the windscreen for a new car however I'd agree. I didn't want to take an unknown amount out in a loan just in case the right car turned up! In essence I don't actually need finance for the vehicle, I could afford it with my ISA, but I think financing makes more sense- it is just sorting out the odds and ends and typically it is in a postal strike.

Just need to see who to try for the loan. Might try the banks with good rates for existing customers which might help rather than worry about the post.

I don't understand this

you are probably earning 3-4% on your ISAand paying 10-15% on the car loan
so why does financing it make more sense?

flyingscotno1

CLAPTON wrote: »

I don't understand this

you are probably earning 3-4% on your ISAand paying 10-15% on the car loan
so why does financing it make more sense?

I'd agree it sounds a bit strange looking at it that way, I know the old principle about paying off debt first rather than savings, but the money built up is for a house- if I spend it now it would take me time to build back up and thus get a mortgage and I'd have to wait longer to get onto the property market. By financing the car purchase the money remains in the ISA to reduce the amount required for a mortgage.

I have a separate savings account which is being used to reduce the loan to as little as possible.

CLAPTON

flyingscotno1 wrote: »

I'd agree it sounds a bit strange looking at it that way, I know the old principle about paying off debt first rather than savings, but the money built up is for a house- if I spend it now it would take me time to build back up and thus get a mortgage and I'd have to wait longer to get onto the property market. By financing the car purchase the money remains in the ISA to reduce the amount required for a mortgage.

I have a separate savings account which is being used to reduce the loan to as little as possible.

the mortgage people will look at both your savings and your debts and adjust the mortgage offer accordingly
if buying a house is the priority then buy a much cheaper car.

flyingscotno1

CLAPTON wrote: »

the mortgage people will look at both your savings and your debts and adjust the mortgage offer accordingly
if buying a house is the priority then buy a much cheaper car.

Yeah, fair enough, but then the interest based on the total amount repaid on a loan over 3 years is roughly equivalent to the interest in my ISA- it is very close- so I don't see why I shouldn't go for a loan and keep the ISA and the taxable benefit.