Loan for a car

bobsy852

I'm not sure this is in the right section so forgive me if it's not.

I've been driving around a lot recently wondering how people manage to afford all the cars they have.

I do a lot of work for housing associations and councils for my job (a graduate building surveyor) and drive around their estates where a lot of people are on benefits / minimum wage etc. yet they own almost brand new cars while I'm driving around in a 1998 Renault clio which I usually repair my self as it's cheaper. It's done a lot of miles but it's reliable enough.

My girlfriend is looking to take her driving test next week and I can't help but think a second car may be in order soon.

I own an old BMW which I had a dream of restoring to full glory which I bought when I lived at home with my parents. It's currently SORN but I was hoping to keep that as a fund for an special purchase for my girlfriend within the next year (a VERY special little gift if you know what I mean). :T

I like to think I'm quite money wise, as I have no debts (apart from my student loan) and always pay off any credit card bills etc. in full. With outgoing rent and bills and trying to save for a holiday next year with my girlfriend (and said special occasion), I don't see how it's possible to afford a new car?

So I'm wondering how people manage to afford another car?

I don't want a brand new car. Ideally I'd like a Volvo C30 But second hand they're around £7000. And I don't want to get into one of those hire-purchase schemes!

I could may be put £1000 towards the cost but couldn't afford one if I saved up for a number of years!

What's the best way to fund a new car? Should I get a loan? Put it on credit cards? Or just not buy one and stick with the old banger and keep my fingers crossed the girlfriend doesn't crash it after passing her test!

[Deleted User]

I'd use what you have. Or buy something with your savings. Remember to factor in insurance and running costs though.

19lottie82

hi OP - the money savers on here would say, stick with the clio if it's reliable, and stick what you would be paying as a loan repayment, in the bank to put towards a replacement when it finally dies.

the majority of people driving around in expensive cars have them on HP schemes, or get a company car (or allowance, I think)....

stator

If you're money wise stick to owning cars outright! I have always bought my cars with cash and it feels good knowing you own the whole thing.
A huge proportion of people don't own their cars or they have debts associated with their cars. Car finance is easier to get than cash loans because the banks have something they can come and repossess. Plus most people think of cars as 'status symbols'. By the time they've finished paying off the car they immediately go out and buy a new one on finance. If they added up all the interest they would see how much money they are wasting. If they buy the car on hire purchase they aren't even getting anything out of it, when the hire purchase ends they don't own the car, they were just leasing it.
In my opinion you don't need to spend more than £2000 on a car. Cars over 10 years old can be very reliable these days and there are plenty with a good history and low mileage.

thebritishbloke

stator wrote: »

If they buy the car on hire purchase they aren't even getting anything out of it, when the hire purchase ends they don't own the car, they were just leasing it.

You're confusing Hire Purchase (HP) with either a Personal Contract Purchase (PCP) or a lease. With PCP you own the car so long as you pay off the balloon payment. With a lease you'll never own the car. With a HP, you're paying to own the car.

bsms1147

bobsy852 wrote: »

I do a lot of work for housing associations and councils for my job (a graduate building surveyor) and drive around their estates where a lot of people are on benefits / minimum wage etc. yet they own almost brand new cars

Probably all stolen, innit.

Caroline_a

Is your girlfriend not looking to have some input about a car that appears to be for her? If it was me, I'd certainly want to be making my own mind up about what I wanted, and paying for it myself!

nomoneytoday

My 8 year old Toyota had pretty much stopped depreciating, butwas starting to get "bills".

The newer one costs 11p/mile for fuel vs 17p for the old one.

There is no maintenance as the next two services areincluded, as is a 5 year warranty, so my monthly bill is £180 plus fuel. Road tax is free vs £135.

The old one needed a new exhaust and spring in the last year, with a clutch and possible driveshaft due in the next year. Add in a £200 service, and assuming a £400 annual parts spend, trading in the old one gives already £1400 odd towards a new one. That's if nothing else goes wrong or gets flagged at MOT time. I am not a mechanic so can't DIY too much.

forgotmyname

But your new one will depreciate by £1400 within a few months wont it?

bargainbetty

rogerlbo34 wrote: »

Whether you're in the market for a new auto loan or want to refinance your current one, first take time to review your auto financing options.

Your new car loan will build your credit rating as you make on-time payments. Getting a loan for a car also contributes to your credit mix and can improve your credit score. Refinancing your auto loan by negotiating with new lenders and leveraging your credit rating can reduce your interest rate and save money. Be sure to monitor your credit to see how your new card affects your score over time.

See reviews and offers to find the best auto financing for new and used cars. Rates are updated daily from dozens of national and local financial institutions.

Or... don't take out a loan to buy something that you don't actually need. And review UK based information, rather than US advice.

SilverSaloon

keep the car you have if it runs well, if not flog it on ebay and buy another cheaper car sub £1000.

keep your money - if you are planning on getting married and probably starting a family in the next few years, a £7k debt is something you wont want