Credit Card or Loan...

KrazyKel

Im looking to get a car soon, Ive seen one i like and the garage has a special on the car i want which is 0% APR with 50% Deposit

If i dont get it from this place, and look for a car elsewhere, im wondering what my options are.

Either a loan for £5k. or what about Credit Cards - I dont really know what they mean by balance transfers etc, - would that work if i get a high enough limit?

I get letters from my bank (lloyds) quite often saying guaranteed loan of £1k etc but dont really know what my best option is

DVardysShadow

If you want to be debt free, then perhaps you should save up?

KrazyKel

I am debt free (well until i get my car) and have 5k saved up so far.
Im choosing to buy a car rather than go down the motability route with my Disability Living Allowence.

Tixy

To get a new credit card with a limit in excess of £5k is highly unlikely in the current financial climate.
Card borrowing is usually at a higher rate than a loan.

Remember if you take out a loan/card or any borrowing for your 50% deposit then this will show up on your credit report when they come to look at lending you the other £5k.

How much can you afford to repay each month (in total for the whole debt?)

So in total you'll need to borrow £10k. Do you have any exisiting debts or any credit which you are not using (cards, overdrafts etc)? How does this compare to your income?

Personally I would not be spending £10k on a car if I was borrowing the money. I'd be looking to spend no more than £2k (although that obviously depends on you financial situation).

Tixy

Sorry I see you have already posted and have £5k saved up - can you not get a car for £5k suitable for your needs?

KrazyKel

Tixy wrote: »

To get a new credit card with a limit in excess of £5k is highly unlikely in the current financial climate.
Card borrowing is usually at a higher rate than a loan.

Remember if you take out a loan/card or any borrowing for your 50% deposit then this will show up on your credit report when they come to look at lending you the other £5k.

How much can you afford to repay each month (in total for the whole debt?)

So in total you'll need to borrow £10k. Do you have any exisiting debts or any credit which you are not using (cards, overdrafts etc)? How does this compare to your income?

Personally I would not be spending £10k on a car if I was borrowing the money. I'd be looking to spend no more than £2k (although that obviously depends on you financial situation).

Ive got the 5k Saved so thats my 50% Deposit
My DLA is £270 every 4 weeks (£200 of that is the High Rate Mobility) which would all be used up if i did go down the motability route, so looking to pay up to £200 (the car i have seen was around £170 a month for 30 months)

KrazyKel

Tixy wrote: »

Sorry I see you have already posted and have £5k saved up - can you not get a car for £5k suitable for your needs?

I could and probably should get a cheaper car, I normally would save first - the whole lot, but need to get rid of my car before MOT is up in august - and selling my car now i will probably get around £500 for it. Also have a £1250 Graduate overdraft i could use towards it if needed as i dont use it at the moment

DVardysShadow

Why get rid of the present car?

Other than that, if you have the DLA coming in and are confident of the rest of your income, then a 0% deal looks good on paper. The drawback is that you probably don't have so much negotiating power on the price of the vehicle.

KrazyKel

My car that i have now will need a lot of work doing on it when it fails its MOT
Spent about £200 this yr inc mot, but the advisory notice had like 25 things on - lots of welding which will cost more than the car is worth

Poosmate

I would go with the garage's offer, afterall, you're not going to get an interest free loan. Also, you probably wouldn't get a credit card with a £5k limit immediately, they usually start with a lower limit and raise it as you pay off your balance (unless you ask them not to). Also, the longest 0% deal will probably be about 15 months so then you'd have to apply for another CC with another 15 months 0% deal, what if you are refused then? You will be paying interest. You won't if you take the 0% deal with the garage.

Hope that helps.

Poo

KrazyKel

I did have a £1750 limit on a lloyds credit card a few yrs ago, but was cancelled as i only used it once or twice and not since!
I did want to wait till i got my tax credits back (since getting DLA again, waiting for nearly 4 months of backdated payments) but then might miss out on this offer, so just wondered if i waited what my options were