Need new car but bad credit rating

paganini_2

Hi,
My car is 11 years old (fully owned) any I am concerned that it may fail it's MOT next week where it would be more cost effective to get a newer car.

However, I have a bad credit rating.
Due to a redundancy and change of job a few years back I went to the CAB for help as I knew I would soon be in the position of not being able to meet all my payments. The CAB negotiated interest freezes and now most of the debts have been paid. I am now in the position that I can quite afford up to £200 pm on a newer car but due to my credit rating of defaulting on loans/credit cards, I cannot get a bank loan from any main lenders. I have tried my own bank and moneysupermarket.

My work is 35 miles each way and not easily accessible via public transport so I do need a reliable family car with lots of room.
I believe it will be easier to get finance from a car dealer for the reason that if I do not pay, they still have the car as an asset but when I look at the loan calculators plugging in for "bad credit" it comes out about 33% apr over 5 years.

Do I have any other options available to me for a newer car? I am ideally looking for a car under 4 years old and under £7k

ch3101

I'd suggest buying <£500 cars with 6 months mot then scrapping them when you're done with them.

Save up your 200 a month and stay out of debt

Apples2

Sounds like getting it through the mot is cheaper than spending up to £7,000 you don't have on a car.

You can the save up your £200 per month for a long as possible either buying a car with the savings of reducing the amount of finance you would need.

paganini_2

ch3101 wrote: »

I'd suggest buying <£500 cars with 6 months mot then scrapping them when you're done with them.

Save up your 200 a month and stay out of debt

The problem is that I need a reliable car as I do a lot of miles during the week and weekend and due to the nature of my work, cannot be late.

paganini_2

Apples2 wrote: »

Sounds like getting it through the mot is cheaper than spending up to £7,000 you don't have on a car.

You can the save up your £200 per month for a long as possible either buying a car with the savings of reducing the amount of finance you would need.

I am hoping that this is the case. If I can get my car through MOT for under £500 then it would be my preference and allows me time to save a deposit for a another car.

However, is it the case that it is easier to get finance on a car from a dealer than a loan from a bank because the car is an asset?

lippy1923

Why are you worried your car will not pass MOT? Is there repairs you are aware of? Just because it's getting on a bit doesn't always mean it will fail.

If you know of faulty parts that need repairing/replacing sort it out before. Source a cheap, respectable independent mechanic.

Apples2

It is generally easier to get finance at a used car dealer yes. If it is a HP agreement the car is secured so "should" keep the rate lower.
It could be a personal loan arranged by the dealer, unlikely the rate will be anything worth taking.

Of course you will also be dealing with a used car dealer, all day, everyday of the working week he is extracting as much cash as possible from anyone who wanders too close.

He will fool you about interest rates and terms, you will end up feeling violated once you realise what you have done.

Buy cars with cash and never be a slave to finance, before you have finished one arrangement, you need another. Finance pours money away.

John1993_2

paganini wrote: »

The problem is that I need a reliable car as I do a lot of miles during the week and weekend and due to the nature of my work, cannot be late.

It sounds as though you should have been saving quite hard towards the new car, then. How much have you got saved so far?

You certainly don't need to spend £7,000 to get a reliable car. A quick check on Autotrader shows that you can get a low mileage 5 year-old Fiesta with low mileage and a warranty for under £3,000.

Daedalus

lippy1923 wrote: »

Why are you worried your car will not pass MOT? Is there repairs you are aware of? Just because it's getting on a bit doesn't always mean it will fail.

If you know of faulty parts that need repairing/replacing sort it out before. Source a cheap, respectable independent mechanic.

My car is 12 years old has sailed through its MOT without any advisories. It helps to have a friend who takes a quick look at it and let me know of any issues before they arise so I can have them fixed.

OP you must have some contact who has some car knowledge? Be amazed what even a passionate amaetuer can pick up which us normal people can't/

John1993 wrote: »

You certainly don't need to spend £7,000 to get a reliable car. A quick check on Autotrader shows that you can get a low mileage 5 year-old Fiesta with low mileage and a warranty for under £3,000.

I agree, £2-3k is ample to get a solid solid car. Mileage isn't that big an issue if it has been well looked after.

paganini_2

lippy1923 wrote: »

Why are you worried your car will not pass MOT? Is there repairs you are aware of? Just because it's getting on a bit doesn't always mean it will fail.

If you know of faulty parts that need repairing/replacing sort it out before. Source a cheap, respectable independent mechanic.

Because over the last few months it has started to experience some problems that have needed repair. When I had the car in to fix an issue recently the mechanic highlighted a problem that would need to be fixed to pass the MOT.

I am simply looking at what options are available to me if the car does fail and costs too much to repair. Now that I do have some "disposable" income available, I'm just trying to find the best way to finance a replacement car. It's good to know that I don't need to spend £7k to get a reliable car but I do need a car with plenty of boot space so just looking at what's out there.

heartbreak_star

Astras and Rover 25s have good boot space and are reliable.

(you can fit loads of kit and 3 re-enactors/larpers in one of those bad boys)

HBS x