Financing new car - which option

therivierakid

Not sure where this thread should go... it could be loans, credit cards or motoring... my apologies if I have started it in the wrong place.

My wife and I are about to trade in her 11yr old Clio for (hopefully) a 2-3yr old Fiesta/Fusion. We really need something more reliable and practical as our first child is on the way in May. Anyway, I think we might get around £600 for the Clio and we have about £4k we can put down on the new car. We're looking at vehicles around the £8k mark so we'll need 3.5 - 4k from somewhere. Whichever option we go for I would like to have it paid off in full within 3yrs.

I think we have 3 options:
1. Personal loan. I'm happy to go through Zopa as I think our credit score is high enough.

2. 0% balance transfer card - eg one of those Barclaycard ones. This looks like the cheapest option but with a 5 cards between us already I'm concerned that we won't be accepted or we won't get a high enough credit limit to put 4k on there.

3. Go with the financing option that Ford offer us - probably the least hassle but I'm guessing the most expensive. We're off to look at a few cars this weekend so we'll ask about finance options then to get the full picture.

Thanks!

gilbert_and_sullivan

Another option, only spend some of your saved money and buy a car outright.

Your first child is a massive life changer, and an incredibly expensive one at that.

Keeping your outgoings to a minimum will give you the luxury of more options when the time comes to make decisions.

Herzlos

Yeah, you can get a pretty decent car for £4400, and you'll lose less on it.

Nothing exploring the options to get something with a bit of finance, but if you're only borrowing another £4k you're not going to be getting a great rate (which you don't seem to get unless borrowing £7k+)

therivierakid

Hmmm... it's a great idea buying a cheaper car but my wife will *not* go for it! I might try persuading her when we're looking around on Saturday. She originally wanted a £12.5k B-Max instead that was specced up to the nines just because it was a "great deal".

Stooby2

Are you paying credit card type interest on all your cards? If so, this might be the time to consider consoildating them, plus the money needed for the car into one loan. Sainsbury's are doing 4.5% on loans over £7500. In the long term this may save you money over the credit card interest and other finance options.

http://www.moneysavingexpert.com/loans/cheap-personal-loans

Use the slider on the MSE site.

And be careful with dealer financing as they are very good at hiding "loan arrangement fees", etc, until the day you go to sign the agreement.

therivierakid

Thanks. No, there's no other credit card debts. No debts at all in fact, excluding the mortgage. It looks like we could get a £4k loan from Santander cheaper than Zopa.

eschaton

therivierakid wrote: »

Hmmm... it's a great idea buying a cheaper car but my wife will *not* go for it! I might try persuading her when we're looking around on Saturday. She originally wanted a £12.5k B-Max instead that was specced up to the nines just because it was a "great deal".

Put your foot down and tell her she can get a car that you can *afford* which is a car worth £4600.


Why go into debt for a car with a kid on the way?