new car

rosie_read

My mum, a British pensioner, has recently returned to the UK after living abroad for about 8 years. She has applied for a 3-year interest free loan to buy a brand new car but has been turned down because she has not lived in the UK for the past 3 years. Should she use her savings to buy the car outright, or is there a better way?

JournalGirl

If I was her, and she has enough savings to use, and still enough to provide a little safety net for herself. I would then set up a monthly standing order from my main income account back to the savings account, as if she was paying the loan back to herself, to rebuild her savings over the term she would have taken the loan for.

There are plenty of reasonably priced cars out there, she just needs to look around until she finds a good one. Good Luck.

KingElvis

This will be due to lack of UK credit history.

andymc29

Use her savings to buy the car. Never take credit out when you have the cash.

redpete

What else is she planning to use her savings for?

She will almost certainly be paying more interest on a car loan than she would be earning on her savings - so my choice would be to pay for it in cash.

One other point to consider would be if she gets any discount from the dealer for paying cash, although if the dealer takes commission on a loan they might not offer it.

27col

Why would you want to borrow money to buy a car when you have enough in the bank to pay cash. Especially with the rubbish interest rates that savings are getting.