Advice needed, not a clue where to start!

ohwhatapalaver

Hello all, i am new to the forums here but i am in a bit of a predicament and could do with some help.
I recently got some compensation from when my car was written off over 2 and a half years ago. The plan was to buy a replacement car with the money. However, now that the cheque is in bank and it has quite nicely paid off my overdraft for me, i am reluctant to go right back in to my overdraft again by buying a car.
What i would like to do is get a credit card or loan for a car and stay in credit with my bank. I don't want an expensive car (around £1000 ) but we really do need one. I've been without my own transport for over 2 and half years and its been doing my head in!!
Advice would be greatly appreciated, thanks in advance

InsideInsurance

Advice on what?

Either is possible, car companies often add a fee for using a credit card but it is probably less than the interest rate you'll be paying so as long as you can pay it off within the interest free period but that assumes your credit rating is good enough to get a 0% APR purchase card

pqrdef

How's your credit record? Have you been well behaved with the overdraft?

Say you want a loan to buy a car and lenders beat a path to your door, but a lot of them are expensive lenders. They may quote a cheap rate and then slap on a fee that does nasty things to the APR.

£1000 isn't favourite loan territory, the interest doesn't cover the admin costs. Bigger loans come cheaper. Banks like to keep the £1000 area for overdrafts and credit cards. But if you haven't had a card before, you might only get an expensive one.

Zopa used to be notably cheap in that bracket. It'll be less cheap now but may still be worth a try (and may be cheaper through a comparison or cashback site).

AlwaysLearnin

0% credit cards (and possibly free overdrafts as part of a joining incentive) can work for shorter term borrowing if utilised properly, but how are you planning to pay it back? For example, have you managed to put any extra away in the two and a half years with no car costs that can now be diverted to payments? If you won't be able to pay off by the end of the 'term', then you could get hit with hefty fees/charges/interest.

ohwhatapalaver

thanks for info. i was thinking a credit card might be a good idea but i'm not sure i'll be eligible for a decent one, also might want to buy car from private sale so in that case a credit card would be useless.
i am a total rookie when it comes to credit cards, i've only ever had one with pretty high interest and have hardy used it, i only got it to improve my credit rating.
i have been fairly well behaved with my overdraft, hardly ever went over it so i guess that goes in my favour. i have however got one dodgy thing on my credit history where a really small amount of cash got written off as i (stupidly) thought the finance payments had finished when they hadn't so cancelled the direct debit, didn't find out till years later when i checked my credit file for the first time! everything else on there is good though

InsideInsurance

ohwhatapalaver wrote: »

i am a total rookie when it comes to credit cards, i've only ever had one with pretty high interest and have hardy used it, i only got it to improve my credit rating.
i have been fairly well behaved with my overdraft, hardly ever went over it so i guess that goes in my favour. i have however got one dodgy thing on my credit history where a really small amount of cash got written off as i (stupidly) thought the finance payments had finished when they hadn't so cancelled the direct debit, didn't find out till years later when i checked my credit file for the first time! everything else on there is good though

The above are all issues.

On the basis you "hardly ever go over it" suggests to me that you are fairly regularly in it which is another red flag to many prime lenders.

By the sounds of it you may well struggle to get any finance at a reasonable APR