Need new car for work, large deposit but still need loan

petepete99

Hey all,

I need to buy a new car pretty urgently as I have a new job that will require me to travel around the country on quite a regular basis.

I am looking at a car around 5k, most probably a 07 or 08 honda civic diesel. I am choosing car based on economy, kit, residuals, easy to sell on, VERY reliable and it's not a bad car to own/drive, plus very good second hand prices and cheap servicing.

I can afford to put down about 2k as a deposit, and I do believe I will be getting a car allowance with my new position but have no idea what it will be yet, I'm guessing around the 300gbp p/m mark.

Unfortunately, I defaulted on a credit card and loan about a year ago and am still in the process of sorting that out. I have an Experian 'credit score' of 963(!), but we all know that number is just a load of bo***ks.

What do you think my chances are of getting a decent short term (12 month) loan considering I'm paying for 40% of the car. Are car loans secured on the car these days anyway?

Also, I know a lot of you will probably say "you have 2k, you can get a great car for that". 30 or 40,000mi pa is going to want to be done in a more reliable car, otherwise it really is a false economy, right?! (correct me if I'm wrong).

Anyway, as ever your input and constructive criticism is always appreciated!

Pete

petepete99

Nobody???

opinions4u

I defaulted on a credit card and loan about a year ago and am still in the process of sorting that

When will it be "sorted"?

Why isn't it sorted already?

Own bank would be the best bet - assuming that's not who the loan and credit card are with.

petepete99

Why isn't it sorted already?

Own bank would be the best bet - assuming that's not who the loan and credit card are with.[/QUOTE]

I am in the process of paying one of those creditors back.

chalkie99

I do believe I will be getting a car allowance with my new position but have no idea what it will be yet, I'm guessing around the 300gbp p/m mark

First thing - find out!

Ask your new employers for the facts. How can you possibly make a judgement on taking finance without even knowing what they are going to be paying you?

petepete99

chalkie99 wrote: »

First thing - find out!

Ask your new employers for the facts. How can you possibly make a judgement on taking finance without even knowing what they are going to be paying you?

Actually regardless of whether they were going to be giving me a car allowance or not, I was still preparing to make the purchase and do the credit deal as per above. But I mentioned it in case lenders would view that as a good thing. If not then I'm not going to wait until they approve the allowance, I'm just going to go and talk to my bank immediately.

Remember, it's a case of 'needing' and not 'wanting'. I will buy my 'want' car with cash when I earn my much sought after (and probably well-earned) bonus.

Stuart_W

Speak to your bank first.

If not, there is likely to be some car finance company willing to give you a loan if you are putting down a 40% deposit - and whilst these will not be at such a competitive interest rate it is worth remembering that loan providers must allow you to pay off your loan early (generally a penalty of no more than 2 months interest applies) so you can aim to do this and the loan should be gone in a year if you've got £300/month allocated.

petepete99

Stuart_W wrote: »

Speak to your bank first.

If not, there is likely to be some car finance company willing to give you a loan if you are putting down a 40% deposit - and whilst these will not be at such a competitive interest rate it is worth remembering that loan providers must allow you to pay off your loan early (generally a penalty of no more than 2 months interest applies) so you can aim to do this and the loan should be gone in a year if you've got £300/month allocated.

Exactly. I'm looking to pay the loan off as early as possible, I have a decent paying job and a need for a car. I'll talk to my bank first, although I don't think Barclays does short term borrowing of 12 months, at least not accordind to their website anyway.

rochja

Have you considered a lease scheme? With the mileage you state you will do this could prove prohibitively expensive but if you live somewhere there is a city car scheme you might be able to put business mileage on the lease car - subsidised by any company payment and private mileage on a 'city car'. Leases can vary greatly in price but you get a new reliable car to use at a fraction of the cost of buying. You can also get use of a variety of cars for about £50 pa plus £6 ph plus 2p per mile with no fuel cost, no repair costs etc. Also because lease is effectively pay as you use it is easy to come by

petepete99

rochja wrote: »

Have you considered a lease scheme? With the mileage you state you will do this could prove prohibitively expensive but if you live somewhere there is a city car scheme you might be able to put business mileage on the lease car - subsidised by any company payment and private mileage on a 'city car'. Leases can vary greatly in price but you get a new reliable car to use at a fraction of the cost of buying. You can also get use of a variety of cars for about £50 pa plus £6 ph plus 2p per mile with no fuel cost, no repair costs etc. Also because lease is effectively pay as you use it is easy to come by

Will have to look into this city car scheme, although not sure it would be local to me as I am in quite rural Oxfordshire...

Do you think general leasing scheme (pch/pcp) will be an option for me given my less than perfect credit history?

Stuart_W

petepete99 wrote: »

Exactly. I'm looking to pay the loan off as early as possible, I have a decent paying job and a need for a car. I'll talk to my bank first, although I don't think Barclays does short term borrowing of 12 months, at least not accordind to their website anyway.

If you are stuck with Barclays, you might find you end up being offered more than you want for longer than you need - eg Barclays may offer you 15.9% on £5,000 over 2 years - but you can pay off the £2,000 you don't need soon after getting it (I know this sounds daft) and overpay the rest as quickly as you can, and it should only cost about £250ish in interest in total.

From Barclay's website:

Repaying your new loan early:You can also repay your loan earlier than planned in full or in part at any time. An early settlement fee of 30 days' interest on the loan balance outstanding at the settlement date will be payable in addition to any other interest due.

AFAIK, all loans should now offer full or part early repayments for no more than one or two months interest.