Loan for a new car?

Pyrrhic_2

I am currently debating whether or not to get finance for a car, or just buy a cheap old banger.

I have £2,100 of debt at the moment, and unfortunately due to a complete farce by a company I have a default on my credit rating for £16 which I am contesting at the moment. It was paid off at the end of last year. Everything else has always been paid on time, with no late notices on my credit file. Of course this default brings my credit rating down a fair whack.

So would I even get a lend for a small amount of car finance (I was looking in the region of £3k?) for a little car for myself, or would the default totally stop it happening?

I have been thinking about going down the old banger route, but I worry about what I may be buying and as I live very rurally I need something that is a bit reliable (most dealers seem to offer warranties on used cars).

I am a bit clueless as this would be my first car (only just passed my test in my late twenties ) so would welcome any advice.

paddyrg

If you're in debt at the moment, my suggestion would be to make sacrifices to clear that debt as opposed to getting deeper into debt. Once you're clear and saving you will be in a stronger position to make choices! Can you hunt around, get some old workhorse with a years MOT for a few hundred quid (ie someone is pretty confident it won't manage the next MOT and wants rid!), and drive it into the ground? A newer car may cost you more to insure too, don't forget!

Rico6.9

Congratulations on passing your test. Sadly the default will probably prevent you getting any credit.

I have been in your situation and had no choice but to keep fixing my old banger. I also had to pay much more interest on the existing debt. (Still am)

It sounds like you may have some hope at getting the default removed if you can speak to someone kind with a sense of reason at the company that defaulted you.

Other than that, it seems you're screwed with the rest of us. In that case, speak to you MP.

I'm taking the first case to the Supreme Court soon. My solicitor Frances McCartney would be happy to have a few lines from you about how the default totally annihilates your credit rating.

We're looking to prevent banks defaulting disputed accounts.

I hope you find a sympathetic person but in case you don't, you can help our cause by e-mailing Frances at

[EMAIL="fm@patrickcampbellsolicitors.co.uk"]fm@patrickcampbellsolicitors.co.uk[/EMAIL]

Good luck.

dgtazzman

Have a look for an old Rover 200 series or something like that. Cheap as chips as they're pretty old and Rover is no more, but they were built when Rover was owned by BMW, so they're solid as a rock. Still plenty of spares around as MG basicly took over the model under a different name and kept making it.

Got ours for 480 quid last year and am pretty happy with it. Probably won't be worth pouring money in it for the next MOT as it will probably need new tires and the windshield has a chip in it now, but 480 pounds for a decent car for 12 months is a pretty sweet deal and you don't want to spend much on your first car. Find one with the smallest engine you can to save on insurance too as money already seems tight for you.

Pyrrhic_2

Thanks so much for the posts, much appreciated. My debt is at a manageable level, and I am currently paying it back at a rate of double what I have to but as you all correctly point out - is it really sensible to get into more debt.

I think I worried that I don't know what I should be looking for in a car (small engine, service history and good milage for age?) and would buy something that would cost me more in the long run.

I guess there was something comforting and easy about going to a dealer, getting a more expensive car but getting the warranty with it and the fact it would be a newer car with potentially less problems (or maybe not in some cases!)

I work on a farm, so need something with a small engine but has a bit of 'work horse' attitude about it. A co-worker has a T reg fiesta that she actually got for free (right place, right time. Lucky for some!) but had to pay £250 to put it through an MOT so it evened itself out. The car has had no end of problems since the MOT, which would costs more than the car is worth to fix but is drivable.

So I think I'll go down the old banger route, and keep my fingers crossed that I don't get a bad 'un.

Pyrrhic_2

Rico6.9 wrote: »

I'm taking the first case to the Supreme Court soon. My solicitor Frances McCartney would be happy to have a few lines from you about how the default totally annihilates your credit rating.

We're looking to prevent banks defaulting disputed accounts.

I hope you find a sympathetic person but in case you don't, you can help our cause by e-mailing Frances at

[EMAIL="fm@patrickcampbellsolicitors.co.uk"]fm@patrickcampbellsolicitors.co.uk[/EMAIL]

Good luck.

My issue it with a very well known high street retailer, rather than a bank.

I had no idea this company even did credit, placed an order online was asked for my card details, clicked 'submit order' and thought no more about it.

What they actually did was ignore my card details (apparently they only took them to confirm my identity!), and open up a credit account in my name. I never received anything in writing to confirm that this had been done and there was nothing obvious on their website that stated they work on credit. Of course it was hidden in the small print, more fool me for not reading it but I genuinely though I was purchasing the items up front by giving them my card.

First I knew about it was a letter from a debt collection agency, and I was mortified and paid it straight away.

Phone calls to the company have proved useless. Apparently if they remove the default 'they would be lying to credit agencies about my credit history'.

So my fault for not reading the small print, but surely they should have an obligation to make it obvious I was being credit checked and having a credit account open.

paddyrg

Pyrrhic wrote: »

I work on a farm, so need something with a small engine but has a bit of 'work horse' attitude about it....So I think I'll go down the old banger route, and keep my fingers crossed that I don't get a bad 'un.

If you work on a farm, this is probably a good idea - you'll be terrified of carrying haybales in a new car, you'll be wanting to change after a wet day at work before dampening your seats, etc. And having a farming/rural background myself, I know cows are generally unimpressed with fancy cars ;-)

Pyrrhic_2

paddyrg wrote: »

If you work on a farm, this is probably a good idea - you'll be terrified of carrying haybales in a new car, you'll be wanting to change after a wet day at work before dampening your seats, etc. And having a farming/rural background myself, I know cows are generally unimpressed with fancy cars ;-)

hehe Haybales, feed, ropes and gadgets strewn across the floor, couple of dogs lurking on back seats...my friends car is utter carnage and I have sworn blind my future car would not be the same! (easy to say now!) We're worked out we can fit ourselves, 6 large feed bags, three jerry cans of water, several buckets and a border collie in her little fiesta

I had nightmares of buying an old banger and not being able to get to work because it's broken down and can't afford the repairs. Or worse, something going wrong on the 80 mile round trip to the our feed merchant and getting stuck in the middle of nowhere!

paddyrg

Pyrrhic wrote: »

I had nightmares of buying an old banger and not being able to get to work because it's broken down and can't afford the repairs.

If you get an older simpler car, it'll be easier to fix up with bailer twine than something with engine management systems, etc. And as soon as you put a feed sack in it, it will probably be unwarrantyable anyway ;-)

wonderpupp

I got a honda civic 1.4 (1998) for £3100 on finance (all on finance, the car was supposed to be £4100)

The first MOT cost me £450 ofr tyres and things.
It has gone through the last 4 MOTs with no further costs, except maybe a windscreen wiper here and there.

I paid the finance off in about 6 months (saved what I could) but at the time, I couldn't save for 6 months to get up the £3100 I needed.
so it only cost me an extra £125 or so in interest for having the finance. May sound crap in the grand scheme of things, but taking the finance got me a car for £875 cheaper.

Really cheap to tax and insure too, as a first car. I'll be sad to see it go, but it's still going.

Love Honda...

Rico6.9

Pyrrhic wrote: »

First I knew about it was a letter from a debt collection agency, and I was mortified and paid it straight away.

Phone calls to the company have proved useless. Apparently if they remove the default 'they would be lying to credit agencies about my credit history'.

So my fault for not reading the small print, but surely they should have an obligation to make it obvious I was being credit checked and having a credit account open.

Big of you to accept some blame but these guys are evil. They know most folk don't read the small print and take full advantage. I hope you'll not need credit for the next 6 years because that's what you're facing.

They are lying by saying you are a bad debtor. You're clearly not but every creditor will believe that you are.

They shouldn't have defaulted you without warning you. If you could be bothered you could probably get £5K in the small claims court quoting "Durkin v HFC". The claim itself would likely inspire them to remove the default too.

If you've no need for credit though, life may well be simpler to let it slide.

Enjoy.