car loan

worried123

Hi, I wonder whether anyone can give their opinion please.

This will sound very naive. However, 8 years ago I became bankrupt. Since that time I have only used a cash account and still do so. (it doesnt pose me any problems and it is one way of being completely unable to go overdrawn or owe money to anyone) Experian told me last year that everything will have fallen off my records by last october (yet to check this out - as i dont have a debit card cannot check it online and will have to write to them)......

I have not even approached my bank to open a basic current account yet and will do so obviously.........

My problem is that I use my car for work driving to various appointments and locations every day - I could not do my job without my car. My car is 11 years old now (had it from new) and is no longer financially viable because of constant repairs and also it is no longer reliable....I need a new car!!

I do not earn a fortune and over the last few years, due to be given not great assignments (i am freelance but my company deduct paye and nat ins and pay me holiday pay) I havent earned a great deal.

You dont know me so i neednt feel too ashamed.....over the last two years I have earned around £20,000 (with about £3,000 on top for expenses).......this year i will have earned only around £17,000 but have received around £6,000 in expenses on top....(obviously i have not spent out that much - we get a mileage allowance and also a meal allowance each day).....but, as you can see, I have not earned a fortune.

I dont think i will ever get a brand new car......and I am not sure what my options are for getting a decent used car (maybe only a couple of years old with low mileage)....

Also, I am 58 soon (my pensionable age isnt until 66 so have 8 more years of being waged)....so dont know whether that will go against me. (i am female by the way).

Obviously i need to change my cash account to a current account with debit card with my bank....but what are my options?? I naturally want to borrow as much as i can for a new car and dont know who i should approach. i have been out of the borrowing, credit and overdraft scene for such a long time now that i truly dont know what my options are and a i know they will be limited. (my outgoings are fairly modest - I dont know whther they ask you this......rent/mortg only 380 a month and i have no debt obviously)

I.E. due to my circumstances and low wage would either my bank or car dealer, whoever lend me about £7,000 - i would probably get under 1,000 trade in for my car or about 1400 if i sold it privately (and i dont want the hassle or responsibility of that)...

I dont want to buy an older used car as i may as well keep my old car on the road.......you just dont know what problems you are going to get with used cars......ideally i would love a new car (i am looking at the cheaper end of the market obviously - a micra etc - i ahve a vauxhall corsa at the moment and never again!!)

Thank you so much...

Ebe_Scrooge

It's difficult to give any honest opinions about who would be prepared to offer a loan, but for what it's worth .... :

As a VERY broad guideline, responsible lenders will lend you up to 50% of your salary, maximum. This is, as I say, a very broad guideline, and they will also take into account a multitude of other factors. I would suggest your bank would be a good first port of call, otherwise you could approach any other reputable company ( building societies, post office, co-op, etc. ). You could look at a car dealer's finance package, but make sure you compare the true overall cost of the whole package, as compared to a personal loan.

In terms of buying a car, a new car is definitely NOT MSE. You will be far better off buying something like a 2 or 3 year old car that's been properly serviced. This should still be reliable and economical, and may even have the balance of a warranty left on it, and will be a fraction of the new price.

That's my two pen'th anyhow, hope it's of some help :-)

Tixy

How soon are you hoping to borrow the money - straight away, or would you existing car last a few more months if necessary.

Your lack of credit history could well be an issue. Do you have any current credit accounts (such as mobile phone contract/utility bills that may be on your credit file)? Are you on the electoral roll?

I'd first be looking to change you cash account to a full bank account with your current bank. Then as suggested above speaking to the bank (perhaps in branch) to see of the likelihood of being accepted for a loan - they may be able to give you an indication before they perform a credit search.

As you ideally want to minimise the number of full credit searches another option to look is to consider a 'soft search' application quote with nationwide bank - this doesn't put a full search on your credit file and should give you an indication as to whether you would be accepted and at what APR.

If you struggle to get an unsecured loan then car finance should be a bit easier to get.

imoneyop

Your big problem is that you are going to have no credit history whatsoever showing up on your credit reports.

This means that the lender is going to have notheing to judge your creditworthyness on and is likely to result in a high APR or an outright decline.

as400

Try not to borrow money on a depreciating asset.

Instead of borrowing £7000 try to save £4000 and buy outright something like a Renault Clio diesel dci.

£30 tax, 60mpg, tough little engines plus all the toys like air con power windows and steering etc...

http://www.autotrader.co.uk/classified/advert/201402041547882/sort/default/usedcars/engine-size-cars/1-4l_to_1-6l/page/1/price-from/2500/seller-type/trade_adverts/fuel-type/diesel/model/clio/maximum-mileage/up_to_60000_miles/price-to/4500/radius/1500/onesearchad/used%2Cnearlynew%2Cnew/postcode/rh41qa/keywords/dci/make/renault?logcode=p

worried123

Thank you all very much indeed. You have all been very helpful indeed and I appreciate your advice and opinions.

First port of call is opening a proper current account with my bank.

Best wishes and many thanks