Car finance - alternatives

berneslai

I'm looking to purchase a new car at a price of £35k and looking to finance over 4 years but I'm having real troubles with the car financing. They are charging APRs on PCP and HP of 11%-13%, effectively forcing me to pay 20%+ on top of the new car price.

I appreciate that the value is outside the normal £25k max of personal loans. Is there any way of financing a car cheaper without having to resort to a secured loan?

YorkshireBoy

Depending on income and other financial circumstances, credit cards may be an option. However, I suspect you'll need a cracking salary (£60/70K) to get, and be able to maintain over 4 years, that kind of credit.

You say the car is £35K, but how much of this are you looking to finance?

berneslai

I'll be putting down a 5k deposit. I have no real credit rating/salary issues but I just have no way of getting together the cash for the vehicle without using some form of finance. I have available limits on credit cards that could bridge the gap if I could take out a personal loan and then "load" the card (which I know I can't do).

I'm unsure if the dealer would allow me to pay for the car across a debit card and a couple of credit cards - it would look a bit dodgy, surely?

andymc29

I know this is a silly question, but as this is a sensible money management forum; If you can't afford to buy it, then why are you buying it? Who "needs" a 35k car? And if you don't "need" it just "want" it, then it's a big mistake to finance it surely?

YorkshireBoy

berneslai wrote: »

I'm unsure if the dealer would allow me to pay for the car across a debit card and a couple of credit cards - it would look a bit dodgy, surely?

Not "dodgy" as such, but you'll find they'll want to charge a fee (2-3% perhaps) and they'll almost certainly have a limit (perhaps per card) that they'll allow by card. I suspect it'll be nowhere near £30K!

When I suggested credit cards I didn't mean in the traditional purchase sense...I meant using super balance transfer cards. For example, MBNA and Post Office will let you have 0% cash for 18 and 12 months respectively. M&S will let you have 0% cash for 15 months on their Sterling travellers cheques. All have fees of course, ranging from 1-4%, but it will be considerably cheaper borrowing than the 13% APR you're being quoted.

And if you don't get a good enough limit on the MBNA card, then just make a SBT, repay it with a BT elsewhere, and repeat the SBT. It'll cost you 6% in fees per amount SBTd, so still around 1/2 the APR you mention.

Your only worry then is being able to keep it at 0% with a few BTs next year!

A couple of personal loans (totalling the £30K required and perhaps at sub 10% APR) would be a whole lot easier though.

nomoneytoday

andymc29 wrote: »

I know this is a silly question, but as this is a sensible money management forum; If you can't afford to buy it, then why are you buying it? Who "needs" a 35k car? And if you don't "need" it just "want" it, then it's a big mistake to finance it surely?

Maybe the OP can afford the cash flow but not the purchase price?
Only they can decide. Maybe the car was "reduced" from £70,000 and so is an MSE bargain too?

YorkshireBoy

nomoneytoday wrote: »

Maybe the OP can afford the cash flow but not the purchase price?
Only they can decide. Maybe the car was "reduced" from £70,000 and so is an MSE bargain too?

Or maybe the OP's funds are tied up in investments?

Or they're locked into long term savings accounts?

Or the OP has taken the cash alternative to a company car (and funding the payments from increased salary going forward)?