Car Finance/Loan with existing debt...??

BellaMay10

Hi

At the moment I have a company car but my employer is stopping these and from the autumn we will get a car allowance instead (will work out to around £200 a month). I am currently in a lot of debt(!!) but just about managing to pay the minimum payments every month, I have never defaulted and have checked my credit rating and it is an 'excellent' score. I have no savings so will have to get credit to buy a car. My plan is to get a relatively cheap car (but still reliable as I do 60ish miles a day commute) so thinking of spending around £5-6k. However, with an existing debt of around £20k (+ mortgage) will anyone give me a loan or car finance?!?! I'm really worried as I don't have an option but to buy a car - repayments won't be an issue because I'll have the car allowance (+ I will benefit from not paying as much tax on my company car).
Any advice on the best way forward would be appreciated!
Many thanks

Tixy

I'd expect you will struggle to get a personal loan due to the amount of debt you have. Car finance might be a bit easier to get.
Or have you considered something like leasing a car?
If you are struggling to get credit there are lots of reliable cars around for less than £5k though.

Miss_Marple_2

You should be fine to get car finance - I was accepted when I had a worse credit history & higher debt than you.

The car I bought was only £3,000 (but very reliable, honest ), but I could have had more credit than that if I had wanted.

BellaMay10

Thank you very much for the replies. Sounds like car finance might be the way forward then! I'll maybe go to a dealer and see what they say. I'm not a car snob and would be very happy with a cheap car - but as I say its got to be reliable because I do lots of miles, it also has to be fairly big - or have a decent bootspace anyway for a buggy (I currently have a golf and wouldn't want to go any smaller than that!). It also has to look reasonably ok for going to meet clients etc. I know its not the point of this thread but if anyone has any ideas of the kind of thing that would be good to go for I'd be grateful! Thank you

sp1987

BellaMay10 wrote: »

Thank you very much for the replies. Sounds like car finance might be the way forward then! I'll maybe go to a dealer and see what they say. I'm not a car snob and would be very happy with a cheap car - but as I say its got to be reliable because I do lots of miles, it also has to be fairly big - or have a decent bootspace anyway for a buggy (I currently have a golf and wouldn't want to go any smaller than that!). It also has to look reasonably ok for going to meet clients etc. I know its not the point of this thread but if anyone has any ideas of the kind of thing that would be good to go for I'd be grateful! Thank you

Ford focus? Cheaper but a pretty similar car to a golf. Vauxhall astra?

There you go, lol.

ingey.uk

Tixy wrote: »

I'd expect you will struggle to get a personal loan due to the amount of debt you have. Car finance might be a bit easier to get.
Or have you considered something like leasing a car?
If you are struggling to get credit there are lots of reliable cars around for less than £5k though.

lease a car lol
the op does a minimum of 15 1/2k miles a year

60 miles a day x5 x52 =15600
excluding the weekends i looked at this the average lease hire is 10k miles then £0.13 a additional mile (= very expensive) it would be cheaper to buy the car using a loan in my opinion

as i to am a 35k mile a year driver my self (spends a fortune on petrol @ moment:mad::mad:)

lawrie28

ingey.uk wrote: »

lease a car lol
the op does a minimum of 15 1/2k miles a year

60 miles a day x5 x52 =15600
excluding the weekends i looked at this the average lease hire is 10k miles then £0.13 a additional mile (= very expensive) it would be cheaper to buy the car using a loan in my opinion

as i to am a 35k mile a year driver my self (spends a fortune on petrol @ moment:mad::mad:)

But if you tell them your doing more mile, then they will adjust the mothly payment to cover this, at much less than the quoted mileage rate.

Have a word with your company. Who owns the car you use at the moment? Is that leased? do they own it? Can you pay them to use the car? They obviously want to keep you working for them, the costs of replacing someone being so high, so it may be worth having a word with them about it.

Tixy

ingey.uk wrote: »

lease a car lol
the op does a minimum of 15 1/2k miles a year

60 miles a day x5 x52 =15600
excluding the weekends i looked at this the average lease hire is 10k miles then £0.13 a additional mile (= very expensive) it would be cheaper to buy the car using a loan in my opinion

as i to am a 35k mile a year driver my self (spends a fortune on petrol @ moment:mad::mad:)

Certainly might well be cheaper to buy a car on a loan. The OP's problem is they may well not be able to get a loan as they already have a a lot of debt, so they may need to look at alternatives even if more expensive.

And with lease agreements you can specifcy a higher mileage than the 10k miles a year which whilst costing a bit more for the lease each month would substantially reduce the cost compared to the price per extra mile in your calcs.

BellaMay10

Thanks for all the replies...

I've looked into leasing before - it is expensive. I would struggle to get the kind of car I need without subsidising it myself (not something I really want to do!).

I've also looked into buying my current car but its been valued at more than I want to spend - VWs are expensive I think. I'm thinking focus (as someone said) or maybe citroen xsara picasso. But sounds liek I'll have to go with finance rather than a loan.

Still a bit confused and unsure what to do but thanks for the advice guys!

queenofstars

Cars under financing and leasing are more expensive because it require full coverage insurance. You can estimate insurance rate difference with different companies and see what suits you the best.