car loan or use own savings?

Neederwedge

about to change my car.....apparently only one lender will agree to a loan. They will lend me £2,600 over 3 years at £92 pm. this is not the full amount I need but others have said no even though my financial circs are better now than they've ever been and I've not owed a thing for over a year but anyway that's what the finance guy says at the car dealers.

When I said I will just pay the lot myself he suggested I borrow some even if it was for a year in order to get my credit rating improved. has he got a point? I know they like people to borrow cos they get something for it so is this why he's suggesting it?

thanks

wiseshark

If you can afford to use your savings to purchase the car and still have an emergency fund, then use your savings and don't bother with loan offer, which the salesperson will push for in order to make money and commission.

The reason you can't get other loans is because as you have stated earlier on another thread, you are not on the Electoral Roll. I strongly advise that you register your details with the local authority ASAP.

P.S. Ignore any advice from these salespeople about improving your credit rating, they'll say anything to make a sale.

Neederwedge

yes, I thought perhaps that was the case Wiseshark but just wanted to make sure. am doing the ER now : ) cheers!

YorkshireBoy

It's not necessary to 'buy' a credit rating by incurring unnecessary interest charges.


Get a credit card from your bank (or anywhere!) and use/pay off in full each month.

Kayalana99

If it was a 0% interest rate Id probably consider it myself as Id have the cash in bank to get abit of interest as well, I wouldn't pay interest just to get a slightly better credit score, as above he wants commission from a loan sale.

dotdash79

The loan would cost you £3312 over 3 years, no doubt other fees will be added.

dotdash79

Sorry I got distracted by lunch and was meant to carry on.

£700 is a lot of money for "helping your credit file".

Getting a credit card and show that you can manage a credit facility is a lot better, if you can get a cashback one you can make it work for you.

molerat

As above get a credit card and pay it off iiiiiinnnnn ffffffuuuuulllll :money:every month to increase your credit profile. If you can spare the money from savings then do so, pay it back at the same monthly rate you would have done with the loan and it is win win for you.