Car finance through car dealers

pheonixrising21

forgotmyname wrote: »

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.

If the garage is worth anything, it will service/MOT the car before its collected, which will give a year before its needed again, by which time the OP will have paid off the finance. So, no loan to pay when service time comes.

Also, OPs current car needs up to £1000 spending on it, which the OP would need to finance anyway.

You say the warranty will only go so far on the new car, but at least it will have one... plus brakes and tyres are not usually covered under warranty (unless its a fundamental flaw in the braking system, rather than new pads/discs needed) anyway, so either car will run the risk of these being needed. Further negotiation can be done on the new car if the tyres look a bit worn?

Also, the new car is smaller, therefore cheaper to run in terms of fuel and road tax, probably insurance too (but impossible to tell with knowing what the two cars are). For me, doing 18k miles per year, even gaining 10 mpg would save me nearly £500 (about £275 for "average" 10k miles) per year in fuel. Swapping a bigger older car (say a 1.8l Mondeo which will average 35-40 mpg if lucky) for a smaller newer one (say a 1.25 Fiesta, which will get 45-50+), 10 mpg is easily achievable. 20-30mpg extra is possible depending on the cars in question. insurance can fluctuate significantly between different cars. Bigger cars often have more power and are more expensive to insure. Smaller cars often have less power and are cheaper to insure. Smaller, newer cars generate less emissions and the OP may drop down a road tax band or two. All these are potential savings.

The way I see it, in both options at least a £1000 is required, either through some sort of finance or SORN of the car until savings can be made.

OP, how necessary is your car? You mention SORN is an option to save for repairs? How much longer will it take to save for the new car (granted, it may be a different new car by then)? Will you incur any costs by not having your car for a few months, such as bus/train fair to work etc?

Personally, if i were in your position i.e. needing to spend £1000 on repairs or £1200 loan for a new car, I'd go with the loan for the car. It will cost about £120 per month. I'd have to spend about £80 of that in train/bus fare to work, so it would take 30 months for me to save the money (I'm assuming no additonal savings to put in per month other than the monthly payments minus fares). If extra is available then it can be saved in both instances to save faster/settle early.

Plus, in 12 months the car is yours and it will be cheaper to run than your current one so you will be saving money then. I am not taking into account repair costs as either car could need them in the future and no-one will be able to tell until a repair is needed. The new car will probably have a short warranty, will probably be serviced/MOT'd by the garage too. Also, as its newer there is a lower probability of repairs being needed (law of averages).