2 Loans or 1 Loan?

Monkeyballs

Hi,

Possibly a question that's going to go down like a lead balloon but someone has to ask...

Do you really need such an expensive car?

MB

Foxy-Stoat_3

Monkeyballs wrote: »

Hi,

Do you really need such an expensive car?

MB

Wonder if you would ask the same question if the OP wanted a £20-£25K loan, or £15-£20K or £10-£15K to buy a car.

I don't think the OP's company would be happy for him to buy a 10 year old Mondeo diesel if he is representing their company and giving him a substantial car allowance.

norsefox

Foxy-Stoat wrote: »

Wonder if you would ask the same question if the OP wanted a £20-£25K loan, or £15-£20K or £10-£15K to buy a car.

I don't think the OP's company would be happy for him to buy a 10 year old Mondeo diesel if he is representing their company and giving him a substantial car allowance.

What a fantastically brilliant misrepresentation of the options.

You can buy a 6-year-old Mercedes C Class for <£10k - the OP doesn't need a £25k car to represent his company.

Indeed, you could get a 2-year-old 3 series or A4 for <£20k - there are a huge number of options for very upmarket cars for infinitely less than £25,000

Monkeyballs

Foxy-Stoat wrote: »

Wonder if you would ask the same question if the OP wanted a £20-£25K loan, or £15-£20K or £10-£15K to buy a car.

I don't think the OP's company would be happy for him to buy a 10 year old Mondeo diesel if he is representing their company and giving him a substantial car allowance.

I said it was a question that might go down like a lead balloon lol.

As Norsefox mentions there are a lot of other deals out there for a lot less than £20k and while I know he's getting an allowance it doesn't mean he needs to use it...

I'm not judging, far from it just asking a valid question.

MB

Tixy

Will you be looking to get the loan(s) before or after you start your new job?

Before your new job then obviously filling in the application you would need to give your current salary (and possibly currently monthly take home if asked), which could affect their assessment of your affordability.

After you have started then you will obviously be asked how long you have been in the current job, which being very short could cause the potential lender to question the stability of your current job and income.

In terms of 1 or 2 loans - if you go for 2 loans and are accepted for the first then when you make the second application you will be declaring the existence of the first loan as an outstanding debt and monthly outgoing, so it certainly could affect your chance of acceptance of the second loan, or the rate you may be accepted at.

Whilst most lenders unsecured representative rates do go up when borrowing above £15k, they are only representatiev. If you are wanting to borrow in excess of that I would probably still go for a single loan.

Whilst it is possible to get unsecured loans above £25k these are generally harder to get so given that you are looking at cars in the £25-£30k range I would just look at the lower end of your budget (or put some savings towards the new vehicle and try to borrow less than £25k.

All that said I wouldn't discount the idea of dealer finance as that may be the cheapest option.

Clive_Woody

norsefox wrote: »

What a fantastically brilliant misrepresentation of the options.

You can buy a 6-year-old Mercedes C Class for <£10k - the OP doesn't need a £25k car to represent his company.

Indeed, you could get a 2-year-old 3 series or A4 for <£20k - there are a huge number of options for very upmarket cars for infinitely less than £25,000

Some companies such as the one I work for specify in their car policy that if you take the cash allowance then the car you purchase/own should be less than a certain age (I think my policy says max age of 4 years but this is not strictly enforced as most of my travel is international so our clients are never going to see my car).

J666

Tixy wrote: »

Will you be looking to get the loan(s) before or after you start your new job?

Before your new job then obviously filling in the application you would need to give your current salary (and possibly currently monthly take home if asked), which could affect their assessment of your affordability.

After you have started then you will obviously be asked how long you have been in the current job, which being very short could cause the potential lender to question the stability of your current job and income.

In terms of 1 or 2 loans - if you go for 2 loans and are accepted for the first then when you make the second application you will be declaring the existence of the first loan as an outstanding debt and monthly outgoing, so it certainly could affect your chance of acceptance of the second loan, or the rate you may be accepted at.

Whilst most lenders unsecured representative rates do go up when borrowing above £15k, they are only representatiev. If you are wanting to borrow in excess of that I would probably still go for a single loan.

Whilst it is possible to get unsecured loans above £25k these are generally harder to get so given that you are looking at cars in the £25-£30k range I would just look at the lower end of your budget (or put some savings towards the new vehicle and try to borrow less than £25k.

All that said I wouldn't discount the idea of dealer finance as that may be the cheapest option.

Great advice! Thanks very much!

J666

Finance at the dealership was 12%, so quite high...

PCP was 4.99% but I'm very weary of the final (quite large) ballon payment...

I'm thinking of making sure the loan is under 25k and do it as one...

Tixy

How long do you think you will keep the car for? will you need to upgrade fairly regularly (if your employer's do specify a certain age of car being required).

I guess the reason people with car allowances like PCP is that they do often hand the car back rather than pay the balloon payment and then upgrade to a newer car. In effect more like leasing a car and being happy to never own a car free of finance.

Clive_Woody

J666 wrote: »

Finance at the dealership was 12%, so quite high...

PCP was 4.99% but I'm very weary of the final (quite large) ballon payment...

I'm thinking of making sure the loan is under 25k and do it as one...

Could you not take a car on PCP then save any extra cash over the term of the agreement effectively getting several years to test drive the car, at the end of the deal if you like the car and want to keep it use your savings (and maybe a small loan) to pay the balloon payment?

It's none of my business how much you spend on a car but there are a lot of makes and models offering 0% finance deals on cars (although generally non-prestige cars). I got my Skoda Octavia on a 0% finance deal paid for by my car allowance and now that it is paid off it's cash in the bank every month.