Car Hire Purchase with poor credit - advice please

sillyspendy

Hi Guys

My husband owns our house and is a teacher earning 35k.

He has a poor credit rating because last summer I failed to pay 2 months on our next account (I lost my job and my direct debits bounced). The other reason is he is close to his 12k limit on his credit card.

However, no mortgage payments ever missed, no credit card and no missed payments on a 5 year Tesco loan that ended in Jan of this year.

We would like to get a car on HP (looking at a 8k skoda) we have a £1,000 deposit.

My question is can you get HP on a poor rating and what are the APRs roughly?

Eg I know for a car LOAN or personal loan it would be like 40% but I believe car HP is a lot less.

Any advice is great

Thanks

CLAPTON

sillyspendy wrote: »

Hi Guys

My husband owns our house and is a teacher earning 35k.

He has a poor credit rating because last summer I failed to pay 2 months on our next account (I lost my job and my direct debits bounced). The other reason is he is close to his 12k limit on his credit card.

However, no mortgage payments ever missed, no credit card and no missed payments on a 5 year Tesco loan that ended in Jan of this year.

We would like to get a car on HP (looking at a 8k skoda) we have a £1,000 deposit.

My question is can you get HP on a poor rating and what are the APRs roughly?

Eg I know for a car LOAN or personal loan it would be like 40% but I believe car HP is a lot less.

Any advice is great

Thanks

you owe 17,500 and want to borrow another 8,000 making debts of 25,500?

use the 1,000 to buy a cheap car

sillyspendy

no we only have the 12k card now everything else was paid off

thebritishbloke

sillyspendy wrote: »

no we only have the 12k card now everything else was paid off

Do you already have a car?

I'd seriously focus on paying off your current debts before you take on more.

Tixy

I would still go for buying a cheaper runaround / put off buying until he manages to reduce his debts. However,

Was the next account in your name or his name?

Being close to the limit on your credit card likely makes a potential lender think you are a higher risk, as does owing a large amount compared to your salary, but doesn't actually mean you have a poor credit history.

Has he applied for a HP agreement and been declined? And was this before or after the loan was repaid and shown as settled on his credit file?

sillyspendy

the HP with black horse is usually 5-7% but he was offered 13%

Tixy

My question is can you get HP on a poor rating and what are the APRs roughly?

the HP with black horse is usually 5-7% but he was offered 13%

So this is the answer in his case then - he can get an offer.

13% APR is certainly not a horrendous rate, and doesn't indicate a 'poor credit rating' it simply shows they think he is higher risk than some other people.

Whether 13% is a rate he feels comfortable borrowing £7k at is a different question.

It is certainly better some deals we've seen on here of 45%+ with the ability for the lender to switch off use of the car at anytime a payment is missed.

chanz4

The other rates I bet were flat rate 13 is OK for hp

thebritishbloke

chanz4 wrote: »

The other rates I bet were flat rate 13 is OK for hp

Or the 13% could also be flat rate, which would be a nightmare. Personally, I'd never pay more then 6% APR on a HP, you're taking such a hit from depreciation and huge interest.

kuohu

It's worth a look at the OP's posting history.

In July 14 she did an SOA on the DFW board (well done, btw, it's how I got myself back on track) but I'm not sure that it was a conclusive account as there was £600+ free a month which should mean happy days, but perhaps wasn't?

Then in Aug 2014 there was a £15k deposit for a house. I assume this is the factor which has reduced the £25k debt to 'only' a £12k credit card debt now?

It's not a totally clear situation but once again I think the best approach would be to do an SOA on the DFW board and really get a grip on the current situation.

A side comment would be that I've never personally spent £8k on a car and there are far cheaper alternatives - especially when it involves credit to purchase.

Best wishes to the OP to get things sorted.

sillyspendy

No we have 15k deposit which is in our house eg only there once sold

All debts got cleared after some inheritance and some hard graft paying over 400 a month off some debt.

We only have the 12k card which we more than comfortably manage