Advertised Loan Rate

goRt

We all each have a fixed amount of income in our lives and spend that on whatever wee like
What the OP needs to understand is that interest also comes off that amount - money spent on interest can never be spent on anything else

Save for what you want - you'll be better for it

And why do you want a car that costs 13.5k above your existing car, what's wrong with a 3-4 yr old low mileage one

Rafter

Bluemist,

To answer your question, the advertised rates have to be offered to 67% of applicants.

Generally the best buy rates you see from Tesco and others will only be to squeaky clean borrowers looking to borrow no more than 1/3 of their annual income.

The banks have to demonstrate that they have lent responsibly taking into account what would happen if you lost your job and your level of income and outgoings. They also have to look ahead to a time when maybe you aren't living at home any more and whether your loan payments would still be affordable after paying bills, rent, food and other costs.

As for what others have said about the size of loan I'm inclined to agree. What are your longer term plans? Do you want to own your own place one day? Do you want the risk that if you did lose your job that your car would be worth less than your loan and therefore your credit rating will be screwed giving you a possible 6 years when you will either have to pay a fortune for loans or not get any?

Sorry to be harsh but if you want financial security I suggest you borrow a maximum of £8,000 - 50% of your income and that you pay it off over 3 years.

That limits the car you can get to about £5,000 but you should be able to get a perfectly good car (with more reasonable insurance) for that and with some warranty left. It will hopefully still be worth £2,500 in 3 years time when you can trade it in.

Is a flashier car really worth £200 per month more to you? Could you use that £200 to start saving for a house or rent deposit?

Good luck

R.