Car buying process advice?

jbindebt

I’ll not bore you with the make/model details as my question is financially motivated. Thank you in advance for any advice you may have.

I’m looking to replace my current car which has been on finance for three years and is entering its final fourth year. My credit rating wasn’t great at the time but because it has improved and I never missed a payment they have agreed to refinance me and halved my p.a APR. The RETAIL value of my car is between £8000-£9000 and I appreciate a trader will offer me less. The vehicle I am looking at is £22000 advertised and is a good price for its year/mileage etc... My finance company have ran a fresh credit check and agreed to give me £14000 valid for 30 days. Now depending on the trade in value the car dealer offers me and whether they are prepared to come down a grand or two on price this might be straightforward. However, and this is where I need the best advice, the remaining finance on the vehicle is £3000 which would come straight off my car valuation I expect. The finance company has told me to get a valuation on mine from the dealer as normal but not tell them what the remaining finance balance is on my car as the dealer will then offer me a smaller value. I asked if the dealer could simply check that with them and they said they could “attempt” it but they have no need to disclose my personal data to them.
My other option is to almost (there will be a grand left) clear the finance on a credit card I have which is lower interest than the remaining finance anyway. Any thoughts/tips anyone when dealing with the car dealers? I’m holding all the cards at the minute I feel and if they are desperate for a sale I might be ok but not to the extent of bringing a forecourt value of £22000 down to potentially £19000 or less(dependent on valuation).
Am I being too naive or should I just “go for it” as the dealer may simply bite my hand off?

andyfromotley

hmmnn,

I suspect the cheapest way to do this is to sell your car privately. Pay off the outstanding credit obviously.

Search the whole of the market for loans, you could depending on yr credit worthiness get a much cheaper rate than perhaps your finance co are offering you. (what are they offering?)

Then go in and bargain hard with the dealer. I suspect doing it this way will beat any of the methods you describe above.

Finally, i suspect this will fall on deaf ears but £14k debt for a car??? Really?? Crikey!!

SeanG79

I would look at a new finance company, if your credit has improved, then you should be able to secure much lower rates. A sub-prime lender (assuming from the meagre advance they are offering) will never offer as low a rate as a more prime funder.

jbindebt

Andy-14k, I get ya
There's no common-sense involved here in any form whatsoever apart from vehicle research, the heart has made its decision. (Feel free to ridicule)
Sean-Previously finance was 17% p.a now down to 10% p.a. for this one. My credit history was shattered when the recession first hit but my job is good and I thankfully do have the spare cash, I honestly appreciate what you are saying.


I suppose the only part of this I could class as moneysaving is trying to argue a better car forecourt deal and therefore avoid moving existing credit to another place-perhaps I could just get rid of it if I work this "properly". I know my history and the loan rate isn't going to get much better for me for now from a new lender.

SeanG79

17% APR is not excessive for sub-prime, but on a £20k car, I would think you could get lower than 10% APR. Make sure the p.a you have is not FLAT and is in fact APR...

jbindebt

The last deal was 17% p.a. and 39.9 APR.
This one is 10% p.a. and I don't know the APR yet.
The suggestion of my putting some finance on a card has just been knocked back as my finance people said you can not pay credit with credit.
Looks like I'm going to have to rely on charm with the car dealer and a firm "Your offer isn't good enough so I'm off somewhere else and the car that has been sitting on ebay for the last fortnight unsold can remain there".

SeanG79

APR is approx double the flat rate...that is very high!

bsms1147

Option C) Keep the car you have, and not dig an ever deeper hole.

DCFC79

bsms1147 wrote: »

Option C) Keep the car you have, and not dig an ever deeper hole.

Agreed....

Cornucopia

I'd be very surprised if you'll get anything like £3k off of the screen price. I've just been looking for a new car, and I've found dealers very reluctant to discount.

As already noted, borrowing £14K at 10% APR is not sensible... but you know that.

Many manufacturers are giving 0% or low-rate finance at present, and this can make a huge difference to the total cost of owning a car.

andyfromotley

39.9% APR for a car loan. Good god.

If they offer you something similar for this next loan you realise that you will pay £18k in interest on a £14k loan a grand total of £32000 over 5 years!! Are you mad???

KEEP YOUR CURRENT CAR!!!