Car finance through car dealers

jo1972

Hope someone can help me with a car finance question.

I have had poor credit history in the past which means I still can not get credit.

My current car has a few issues, none of which are serious, which need to be fixed next month when it is also due its MOT, service and road tax – and so I am looking at, at least £500 - £1,000, to pay out at the end of next month which I don’t have and so will most probably have to SORN the car until I can save up the money. Therefore I thought I would part exchange it and pick up a smaller car which will suit my needs better.

I saw a car in my local dealers for £2,495 and asked the dealer for a part exchange price on mine, I told him about the faults with it which he wasn't bothered about and said he would give me £1,200 for it, therefore I need £1,300 to fund the new car.

I can’t get credit via banks or credit cards, have nothing to sell and have nobody who can lend me the money, although I can afford to pay this off over 12 months.

Carloans4U have said they have found me a lender, but I am worried about getting into a deal with them after subsequently reading some reviews online and the stipulations they have on where you can buy a car and age and mileage of the car. Plus the high APRs!

The car dealer does offer finance but I am frightened of being turned down and being humiliated yet again.

Does anyone have any idea about car finance from the car dealer and whether as I would be putting £1,200.00 into the deal, plus having a loan secured for 12 months on the car, would mean there is more chance of being accepted for credit? They use Carlyle Finance which has recently changed its name to MotoNovo Finance.

If anyone has any idea, I would appreciate it.

forgotmyname

Your £1200 you need to borrow could turn into £5000 if your not careful.

So next month you will have to pay for a loan and repairs. A £2500 car may need as much spending on it as a £1200 car.

Who knows he maybe selling your car to the next person for £2500.

I know someone paying £7000 for a car thats worth less than £2500.

They balance the figures to make it seem like the deals not too bad. Car overpriced slightly and finance a bit over the top also.
Instead of having the car at a proper price and then you look at the finance and think how much....

And the car your buying probably wont be taxed either. And your insurance may want more money and and and..... You probably wont be better off.
So do the bare essentials and keep your current car.

patchy987

Not a reply about finance but have you considered sourcing the parts yourself and just paying the garage to fit them, we have saved huge amounts on repairs this way

jo1972

Thanks for your responses

I do agree with everything said and have been well and truely bitten before with cars!

The dealer is a family business and been there for over 40 years and always known to be reputable, I know of 5 people that have bought cars from him in the past with no worries. I know that he will mark up my car, I wouldn't expect any less as he needs to make a living. The car I have now is big, costs a lot to feed, fix and maintain and I have no need for a car of such size anymore. Therefore I want to down grade. I've had a look for a car for £1,200 but there's nothing about that I feel I could rely on. Plus, I fancy something new

SeanG79

The dealer will most likely have other avenues for placing customers with finance beyond only Motonovo and will most likely also have a broker, which is exactly what carloans 4 u are.

Has your previous adverse been satisfied and have you had any adverse in the last 6 months? If your prior adverse is now up to date and no adverse in the last 6 months, Motonovo may well approve you for the finance. I dont deal directly with Motonovo but work with several of their competitors and this is how they work.

What have you been offered in terms of APR for the finance. The broker is likely to try to maximise their commission on a relatively small advance of £1300.00 also bear in mind there will be credit facility fees and ownership fees associated with the finance that could amount to anything from 10% of the loan amount.

jo1972

That is really helpful information SeanG79, thank you. My previous is satisfied although still seems to be affecting everything I do with regards to finances.

I don't know the APRs yet, carloans4U have just emailled me to say that they have found a lender but I haven't contacted them back after reading a couple of horror stories straight after. And I haven't approached the car dealer yet as I really don't want to be humiliated again by being rejected. Feel that I just need to bite the bullet and see what he says and if I'm rejected I'll just have to stop getting my lunch in the cafe next to the car showroom :rotfl:

SeanG79

Like I say not 100% on Motonovo and how they work but I know that I use lenders who are direct competitors that have manual underwriters to look at the application and they will take a view if previous adverse has been satisfied and you have current credit eg a credit card managed satisfactorily with no adverse listed in the last 6 months.

A "human" underwriter will also take into account the relatively large deposit vs small advance on the vehicle, provided the vehicle valuations stack up.

jo1972

Thanks again SeanG79, think I'm going to bite the bullet before the car gets sold to someone else. I can't get myself into any more trouble than I have been in over the last 20 years! I'm actually quite sensible now

Bufger

Have a long think about this.. you're looking at exchanging a possible £500-£1000 of debt for £1200 of debt. And for what?!

Unless this new car will give you more years of motoring than your current vehicle then there is absolutely no sense in this. Look through the old moneysaving board and review all of your bills to try and save yourself some cash in this next month. Sell anything you dont need or use anymore at the most relevant place (musicmagpie, ebay, gumtree for larger things etc). Get yourself out of this situation before taking on debt or at least minimise the debt you take on as much as you can

jo1972

Hi Bufger, yes I understand that. Another reason for doing this is the cost of keeping my current car on the road, which is the main reason for me wanting to downgrade. I am no longer in debt up to my eyeballs, my finances are on the straight and narrow and I can afford to finance this year over a year as opposed to my previous car finances which were over 3-5 years!

I just would like to change my car and wondered whether having the deposit on it would make a difference in me being offered credit.

forgotmyname

I have a gut feeling you will regret this in a few months and wonder why you did it.

The garage maybe legit and all brilliant but cars need servicing and tax and MOT etc etc.. Their warranty on a car at this price level will only go so far.

After a few weeks, Brakes and tyres etc are all down to you. So where will you find the £500 to service it and brakes etc etc. When your paying a loan.