Getting a new car

bloc75

Hi all,

Its been a whole year since my IVA was completed and I have also just paid off a 2k overdraft that my bank had foolishly allowed me to have.

So my debts are minimum and my last look on the Experian credit report was green lights all the way.

I have a decent job and I also have a supplemented income with freelance work also. My wife has a steady income also.

Now we are considering even setting up an ISA now so we can save up for a deposit for a house and we certainly have room to do that and more.

The more is that we need a new car. My car has done over 100k miles but it's still worth around 1.5k my wife's about £500. So we are looking to part-ex it in with perhaps another £500-£1000.

We want to get a new car and I know this will involve getting finance.

I'm not scared of having debt, certainly not for a car that will benefit the whole family, I'm just scared at whether or not I would be knocked back for finance for a car.

Any advice? Anyone been in a similar situation?

National_Debtline

Hello there.

You've mentioned that your credit file is looking healthy once again, on the face of it you may find that seek credit for a vehicle will be possible - especially since most car finance is in the form of hire-purchase which allows potential repossession if the credit agreement is not adhered to. It's vital to research to find a good deal - and to possibly seek financial advice to ensure you're aware of the ins and outs of the new credit agreement. Also complete a comprehensive financial statement to ensure that the new finance is affordable - do remember to factor in fuel, insurance, MOT and servicing costs.

Bear in mind that multiple applications for credit in a short space of time can have an adverse effect on your credit file so make sure that you avoid doing that.

Best wishes,

National Debtline.

bloc75

Comprehensive Financial Statement?

Basically what I earn and what I have to pay out per month?

bloc75

I've checked my Experian and I have green satisfactory indicators for everything.

My IVA was completed last June/July, so I'm thinking this may work.

My income is Pro-rate of £25k p/a which means I get around £1100 a month, I also work freelance for myself where I get £1000-£1500 a month. My wife also earns £1000 per month. All this after tax.

Financially we can do it. I am also not going to be using the car or have any insurance or car tax as I am going green with a bike. It's mainly for the wife really. So we'd be saving hundreds of pounds there too.

Fingers crossed.

bloc75

Right I've just got my credit report from Equifax and it's as follows:

Credit Score 436

I have 1 CCJ which was my IVA that was dated June 2006, so that is now 6 years over.

When does that get wiped?

Credit Agreements

You have 5 active accounts and 2 settled accounts on file at your current address. Credit grantors prefer that you have at least one or two accounts as part of your credit profile. Active accounts are preferred to settled accounts. Good

Your oldest account is 7 year(s) 6 month(s) old. Credit grantors prefer to see accounts opened at least 36 months. Excellent


Your payment history shows that you have previously been 1 month in arrears. While you haven't been significantly overdue in making payments, some credit grantors may not grant you credit if you have other risk signals present on your credit report. Fair


All payments on your accounts are up to date. Excellent


Credit reference agencies are receiving periodic updates from your credit grantor(s) that reflect you have made payments on time in the past. Excellent


You have no defaults. Excellent


Electoral Roll
You are presently shown as registered on the Electoral Roll. You've been registered at your current address for 4 years. This is looked upon favourably by credit grantors. Good


Searches
You have had 0 search(es) for credit in the last six months. Credit grantors view more than one or two searches within six months unfavourably. Excellent


Court Information
You have 1 record(s) that indicates there is a Court Judgment(s) or other public information associated with you. This is seen as somewhat unfavourable by credit grantors. You may find credit difficult to obtain. Poor


So how does that look? How can I go about repairing that some more? If I wait another year will that CCJ be wiped?


Any advice?

bloc75

*bump - sorry.

pivotalgubbins

So, you'll only need to add an extra £500-1000 in order to get a new car (might have misunderstood this)? Why not wait as if you have managed to pay off a £2k overdraft in a year then you will only be looking at 3-6 months before you can pay for a car outright (if a car is a priority forget the ISA for a short period).

Finance for such a small amount is going to be expensive anyway and ultimately why put yourself at risk this early into your 'recovery' from the IVA position.

Also, finally, do you need a new car or just want a new car? Cars can do more that 100k and don't become redundant at this point. Please don't go and purchase something that is brand new - there is no point committing yourself to a 3-5 year finance deal for a lump of metal and four tyres.

bloc75

Its not for a small amount. I was considering a Part-ex plus cash deposit. Car would be around 10-12k.

At the moment I am interested in the results of my credit scoring.

neas

I was buying a 2nd hand car from a dealer.... the 2nd hand car i bought must've been a part ex-change. My car was a 58 plate (just bought it).. and cost £6.5k. I paid cash for it that I had saved.

Thats just background really.. While looking at cars twice at two different garages individuals came in and said along the lines of:

"I have no deposit... I want a brand new car I saw one my friend has (Vauxhall corsa i think it was) I want leather seats, gps sat nav and bigger alloys".

The dealers must wet themselves when people like that come in. Yet I am amased it happens so often. Perhaps its looking at it on face value but she didn't look like she was well off.... and if she had no deposit how in the hell does she think she should get £14k worth of car on credit? just because it 'only costs £300 a month'.

Do you have to buy a new car? Cars lose most of their value in first 3 years... You have about 2k worth now. why not wait 3-4 months and buy a car for 5-6k yourself? Have no debt and end up saving lots more money (interest payments and the car cost different = 8k) for your future home?

bloc75

Hi, I'm not in any need to scrimp and save. No offence like but I feel that purchasing a car on finance is an acceptable debt to have. Like a mortgage is also an acceptable debt to have.

I just really want advice on my credit score.

pivotalgubbins

bloc75 wrote: »

Its not for a small amount. I was considering a Part-ex plus cash deposit. Car would be around 10-12k.

At the moment I am interested in the results of my credit scoring.

Fair enough.

I'm not an expert there so can't advise but you probably won't have an issue securing appropriate finance.

One thing I would strongly recommend though is getting finance that allows you to overpay with no penalties. Then simply pay it back as SOON as you possibly can - get some emergency money in an ISA by all means but paying down the most expensive debt quickly will allow you to go full speed at the ISA/house deposit afterwards!

Plus, do glance at the second-hand car market - there is some ridiculous bargains to be had out there!