New Car Loans - what to do?

WildWayz

Hi all,

I am looking at ways to get a new car as I fancy a bit of a change.

I am with HSBC and have a current account with no overdraft (dont believe in living in them!).

Now, if I was to apply for a loan with HSBC, would they analyze why I don't have loads in my account at the end of the month? We tend to spend what money we have (I know, bad thing) but after the bills go out, we're left with about £1,100 to play with...

So the options are:
Get a loan with HSBC
Get a loan with another loan provider
Get car on PCP (with a balloon payment after 3 years, or give car back but lose deposit)
Get car on lease (give car back at the end of the term, or get a new one)

What do you think would be best?

I do less than 10,000 miles a year (but would enter into a 12,000 contract).

If I lease, the car would be about £21,000 value.
If I PCP, the car would be about £21,000 value, but i'd pay a deposit of £2,500.
If I get a loan, the loan would be for about £18,000 over 5 years (about £350 a month).

What would you suggest as the best way forward?

Thanks!

WildWayz

any suggestions guys?

Thanks!

duggie1982

Depends on your credit rating. I personally would get a loan from a bank with the lowest APR (depends on credit rating) I am also looking at a new car and looked at the leasing option but decided against as nothing at the end of it. If your not in a rush then get your stat credit file for £2 from all 3 agencies and see what it says and go from there.

michael1983l

duggie1982 wrote: »

Depends on your credit rating. I personally would get a loan from a bank with the lowest APR (depends on credit rating) I am also looking at a new car and looked at the leasing option but decided against as nothing at the end of it. If your not in a rush then get your stat credit file for £2 from all 3 agencies and see what it says and go from there.

This, as long as your credit file is spotless this is the best option. Have you thought of buying a 12 month old car instead, you will save yourself thousands and it will be almost brand new anyway.

WildWayz

Yep - been thinking about buying a year old car - but the car I am after (Prius 1.8) don't really have 2nd hand ones on the market, and those that ARE 2nd hand are almost the price of the car new!

As for my credit files - I went bankrupt 6 years and a month ago, so the defaults have dropped off my file (well, all but 2 of them which drop off in a month). My Experian score is 900 (with 2 defaults on there) and my Equifax is 480 (with 2 defaults on there). When they drop off my score will shoot up as I have not missed a payment in 6 years!

michael1983l

I'd definatley wait until your defaults drop off before applying for anything.

WildWayz

Yep - going to do that anyway

michael1983l

Your credit score is quite good but you will be asking for alot of money. I think your most likely to get rejected if you havn't had many credit accounts in the last few years. They might accept if it is secured against the vehicle. That is what I think so don't take it as gospel. does anybody else agree?

sparkysi

If your looking for a new car I would always recommend short term lease. Reason being it is possible to get some cracking deals if your prepared to shop around a bit.

I was recently saw a deal for a BMW 1 series for just over £100 a month on a two year deal. Same sort of cost for a Mini.

Now to me thats a bargain, you can bin the car every couple of years and it should cost you less than the depreciation on new.

Alternatively, seriosuly consider a second hand car thats only been in use for a couple of years. Someone else has already covered the depreciation and most major faults show up in the first year or two.

WildWayz

Ooooh what leasing sites do you recommend? Lingscars.com are quite good.

As for credit accounts, I have a credit card, small loan and a mortgage so we'd be considered quite good (I hope - cos the advice I had was once you were discharged, get a small loan and a credit card and build up your credit history again)...

duggie1982

sparkysi wrote: »

If your looking for a new car I would always recommend short term lease. Reason being it is possible to get some cracking deals if your prepared to shop around a bit.

I was recently saw a deal for a BMW 1 series for just over £100 a month on a two year deal. Same sort of cost for a Mini.

Now to me thats a bargain, you can bin the car every couple of years and it should cost you less than the depreciation on new.

Alternatively, seriosuly consider a second hand car thats only been in use for a couple of years. Someone else has already covered the depreciation and most major faults show up in the first year or two.

Where was that? Come on, spill the beans!! :beer: