Car finance w/ poor credit history

Ant84

I'm currently thinking over getting a new car, as I don't think I can get by much longer without one. The problem is, my credit rating is pretty poor. My business went through a really bad patch for 3 months or so early this year, which resulted in some defaults and a car repossession. Before this, my credit rating appeared to be fairly good.

Things are back to normal now, and I'm wondering if this will really go against me if I choose to get another car? I know it obviously will, but I'm not sure quite to what extent.

I've got a £10,000 deposit too, if I were to apply for finance on a car closer to, say, £20,000, would this drastically improve my chances of acceptance or would it not make too much difference?

Tassotti

Your best bet is to buy a car that is 2-3 yrs old. Deprecition has the most effect in the first 3 years.

10K would get you a very decent motor

Tass

Ant84

Tassotti wrote:

Your best bet is to buy a car that is 2-3 yrs old. Deprecition has the most effect in the first 3 years.

10K would get you a very decent motor

Tass

I don't really want to buy outright. The finance company that repossessed my car a few months ago want a staggering £22,000 from me, which I have absolutely no intention of paying as it's ridiculous for a car I only had for four months. If I buy outright, I heard that if that agreement gets enforced against me, then they could take my car. If I buy on finance, then they can't take anything as far as I'm aware.

Tassotti

The problem is that the 22K default will show up on a credit score. It is unlikely that you will get finance.

You can try, but don't be surprised if you are refused.

anniecave

I would think that if you could get credit, (and I don't think you will be able to because of the default) it would be at a really high interest rate so you'd be just paying rediculous amounts of interest.

Your more pressing problem is the £22,000. Was that just for a car loan? How was the value made up? Was a lot of it charges and interest? Is it possible to negotiate a settlement with them?

I suppose a loophole could be for you to "give" the £10,000 to someone else, and they buy the car for you, and insure it in their name, but have you as a named driver, then the car would actually be theirs not yours?

Ant84

anniecave wrote:

I would think that if you could get credit, (and I don't think you will be able to because of the default) it would be at a really high interest rate so you'd be just paying rediculous amounts of interest.

Your more pressing problem is the £22,000. Was that just for a car loan? How was the value made up? Was a lot of it charges and interest? Is it possible to negotiate a settlement with them?

I suppose a loophole could be for you to "give" the £10,000 to someone else, and they buy the car for you, and insure it in their name, but have you as a named driver, then the car would actually be theirs not yours?

Here's the thread detailing my situation as far as the repossession goes. I think I'd rather serve a jail sentence than give them £22,000, to be honest.

Let me know what you think, as I really don't know where I stand with this, or what options I have.

Their ridiculous charges for letters sent to me and the like were pushing up my payments by nearly £80 every time, and I just couldn't afford it. When I got in touch with them to try and remedy the problem, I got absolutely no assistance whatsoever, and they wouldn't entertain a payment plan or a short break from payments. It seemed like they couldn't wait to repossess the vehicle and leave me in big trouble.

As for the loophole, that's what I was thinking of doing, but I'd just like to be out of debt and sort myself out without bringing other people in my family into it just to bail me out. If the worst came to the worst, then I'd have to go with it.

I just feel like I'm in a big mess at the moment, I've just turned 22, and these defaults and debts are likely to prevent me from being able to enjoy myself and buy my own house etc, which is what I should be doing at my age.

Tassotti

How much was the original debt?

It is unlikely that you will go to prison (although not impossible).

Have the lenders passed the debt onto a debt recovery agency?

You may be able to negotiate a repayment plan with them.

This bad debt will show on your credit file for six years, so it is important that you try and sort it out, as you are trying to sort yourself out.

Be lucky

Tass

Ant84

Sorry, I missed off the link to my thread. Here it is:

http://forums.moneysavingexpert.com/showthread.html?t=263166

tom188

I suppose a loophole could be for you to "give" the £10,000 to someone else, and they buy the car for you, and insure it in their name, but have you as a named driver, then the car would actually be theirs not yours?

Yes but if you were the main driver you would be commiting fraud wrt the insurance.

h4nym

2k will buy you a lot of car these days! I once spent 27,000 quid on a Range Rover and it cost me £800 per month in depreciation alone until I sold it 18 months later.

After that - £2000 is the target and £3,000 is the absolute limit. That way, my maximum exposure is about 4 months worth of Range Rover depreciation.

Before you consider that you won't get much further with your current car, remember that you can get a lot of repairs for the £300 every single month that just the finance will cost!

H

kenshaz

Why not lease a car.