Car Finance

talulahbeige_2

I'm currently considering wether to apply for a loan (M&S) or take out the finance from the car dealership.

Are the car dealership credit applications more likely to go through than with a bank?
Good credit rating, however we already have some credit, so would rather pick the car finance if that is goign to go though quicker / easier

thanks

somethingcorporate

It will likely go through easier because it will be secured on the car. This also means if you do default you may have it repossessed.

iolanthe07

If you take out a loan through a dealership, do watch out for their nasty habit of quoting flat rate interest. They, alone amongst traders, do this - presumably to confuse customers. If you double any flat rate quoted you will get an approximate figure for the APR.

ChopperST

talulahbeige wrote: »

I'm currently considering wether to apply for a loan (M&S) or take out the finance from the car dealership.

Are the car dealership credit applications more likely to go through than with a bank?
Good credit rating, however we already have some credit, so would rather pick the car finance if that is goign to go though quicker / easier

thanks

Had the same dilema as you in December. Have on paper alot of debt, however this is all stoozing on credit cards with the difference pocketed in savings. Decided to treat ourselves to a new car and wanted to finance 40% of it with the rest coming from savings. Was worried about applying for a loan as on paper I look like I have a high debt to income ratio, when in fact I have none.

Opted for the dealership finance in the form of HP in the end and was accepted no problem, however it was 2.5% more than the cheapest personal loan. Since that time I have had two new credit cards for 0% purchases to continue stoozing and an interest finance deal on some jewellery all accepted without a hitch.

In hindsight I probably would have gone for the personal loan initally rather than the HP and if refused used the HP as a back up plan as I had a 60% deposit secured against the car. If you are in a similar position with deposits then I'd suggest you do the same as a personal loan will be cheaper than finance.

talulahbeige_2

Thanks all, great helpful responses.

somethingcorporate - no chance of it being repossesed, we can more than afford the repayments, we just have 2 loans about to run out late this year so it looks like we still have debts

iolanthe07 - we did notice that, although the dealer actually told us to double to flat rate, so good on him.

ChopperST - we are currently waiting for a decision from the loan company and will use the car finance as a back up if needed.

iolanthe07

the dealer actually told us to double to flat rate, so good on him.

One in a million!

somethingcorporate

Then I would go for whichever costs you less over the long term.

HP, if I remember correctly, also gives the opportunity to return the car after 50% has been paid back. If you intend to keep the car this is obviously not an issue.