Sensible Financing

drew2k9

is this idea a good one money wise?

i am planning to get a new car, the finance deal requires a £1000 deposit, then its £99 a month thereafter for 3 years.

i can afford up to £150 a month, but do not have the deposit.

would it make more sense for me to apply for an overdraft to cover the doposit and the other registration charges etc maybe get a £1500 overdraft to make sure its all covered, then save around £50 or so a month and put it all back in to clear the overdraft and then cancell the overdraft when im back out of it?

i was going to get a £1500 loan and pay it back monthly for 3 years alongside the finance deal, but my bank told me that as there would be two credit checks being carried out at the same kind of time that this could affect my credit rating resulting in me not getting one or both of the things sorted.

is a credit check done on a current account for overdrafts? i am allowed up to £3000 overdraft and its a 0% arranged one if that makes sense, so wouldnt be paying interest so cheaper than a loan?

would this work for getting a new car?

i may also be able to borrow off a family member for the deposit, but would rather not owe money to family, feel like id be taking advantage of them!

please if you have any insight let me know, i just want to keep myself right!

maninthestreet

Save for £150 for 6 or 7 months, then you will have the deposit.

Hintza

maninthestreet wrote: »

Save for £150 for 6 or 7 months, then you will have the deposit.

Op I'm sure the reply above has annoyed you but with things the way they are just now I would be very wary of taking out any expensive loans at the moment.

If you can't raise the deposit then either wait or approach family. Just be careful this country is still in a very precarious siuation.

Inactive

I agree, if the OP cannot afford the deposit, then sadly, they cannot really afford the car, harsh fact.

drew2k9

the deal on the car ends on the 31st march, i was considering saving a bit, trying to see if theyl take my old car as part ex and then seeing how much of the deposit i have left to pay then maybe getting that as an overdraft?

is the overdraft a good idea if its 0% and i know i can pay it back in less than a year??

Inactive

drew2k9 wrote: »

is the overdraft a good idea if its 0% and i know i can pay it back in less than a year??

Overdrafts can and do get get called in at very short notice, using an overdraft to fund finance is a very bad idea IMO.

What happens if you lose your job?

drew2k9

well thats the worst case scenario and not looking likely to happen at the moment, im actually going for promotion, so may be able to pay an overdraft off even quicker if i get it! which i hopefully will, but then the "what if you loose your job" argument comes into a large part of life choices, like mortgages, loans, getting married, children, these all need you to have a job. its a very vague area and could happen to anyone at short notice, but i cant see it happening at this stage, think im secure for life in this job, (unless i see something better paid lol).

but thanks all for your advice so far, i understand a lot of you going for the be safe line of thinking, but every once in a while its good to just do something and hope for the best. the reason i want a new car (smart fortwo) is that its the only car i can start my own no claims bonus building on as i can afford to be insured on my own on it, its almost 3 times as economical on petrol as my current car, and its pretty safe in the fact that its brand new, will have a warrantee and will be less likely to break down.

i just feel its a good time for me to get into a new car rather than be stuck in the cycle of old cars and having to stay under my mums insurance to be able to afford it!

Inactive

Well it's your call, if you are happy taking the risk, fair enough, I certainly would not want to.

There are literally thousands of members on this forum dealing with their debts, who should never have gotten in to them in the first place.

Debt is easy to get in to, but nigh impossible and very costly to get out of.

drew2k9

i also have my own car to sell, but as i am unsure how much i will get for it and when i have left that out of the equation, then if i get money for it that could help build back out of the overdraft, i have some money in an isa ive had for years, so could use that if needed, but would prefer it stays in the isa, and if i ever get really stuck i have a motorbike worth £2000 that i could sell if i even got into problems moneywise, so i do have some assets that i could use if i ever got stuck.

so my car will be sold, its valued at 1500, but i think as its a high mileage and may need one or two small things done i may only get 500 if im lucky. so i may only need a smaller overdraft of 500-800ish.

has anyone here had an overdraft of that size? if so how long did it take to get back into the plus numbers? and would you say its a safe way of getting money?

Hintza

Wait a minute.

Why the hell are you not taking your car in and using it as a deposit. Or sell it privately and then use the proceeds to buy the new car.

I have just read your original post again and you have an overdraft facility of £3k @ 0%?

I'm getting confused here.

Inactive

Hintza wrote: »

I'm getting confused here.

You are not alone, to be honest I think that the OP is just waiting for someone to post what he/she wants to hear, then they will be happy.;)