Car loan, crap credit.

glvr

My former partner needs a car, but has poor credit. No CCJs but maybe £8k of unpaid stuff on her file.

I'm aware of various 'guaranteed car credit' offers but haven't yet been able to check 'em - I suspect there's inflated prices, high apr (to be expected, and that's ok) and probably also cases where an upfront arrangement fee then doesn't get a loan.

Any advice appreciated. Please and thanks.

Gaz83

When you say £8k of unpaid credit, do you mean defaulted, late payments etc.?

What's her salary?

glvr

Gaz83 wrote: »

When you say £8k of unpaid credit, do you mean defaulted, late payments etc.?

What's her salary?

Yes... the usual catalogue, credit card, etc - late payments and default, all with Lowells/etcetera.

Salary currently zero, but just about to return to work... single mum so will likely be low earnings - maybe £500 net monthly.

forgotmyname

DON'T DO IT...

My sister went the same route, She "needed" a newer car right now so went to one of those give anyone finance places.
What a big mistake. She now has a car sitting on the drive that needs a load of work that she cannot afford.

And she cannot scrap or sell the car because she still owes more than its worth.

Catch 22 now. Tell her to take whatever she has in her pocket and buy a car with that. You can get a cheap runaround for less than £200 if you look.
OK its going to have some problems but you just put up with the annoying ones and only fix whats essential until she saves enough to buy something better or fix the faults on that one.

But as she is not yet working she may really struggle.

My sisters paying about £8000 for a car that was worth about £2000.

£8000 for 3 years worth of motoring but still paying for it after the cars no longer usable.

If she cannot afford to save she cannot afford the finanace really. Do talk her out of the finance option.

dealer_wins

What forgotmyname says above.

And dont even think about being a guarantor or lending her the money, you would never see it again 100%.

glvr

dealer_wins wrote: »

What forgotmyname says above.

And dont even think about being a guarantor or lending her the money, you would never see it again 100%.

I don't have it to give.

glvr

forgotmyname wrote: »

DON'T DO IT...
Do talk her out of the finance option.

Thanks.

At the moment I'm trying to see if it's workable. What loan she could get and the repayment. Some sources suggest their criteria is a minimum disposable income of £400 - which she'd have with work.

And, albeit a different issue, there's likely some creative way to square buying a new car with a payment arrangement to existing creditors.

We've both had too many cars which have seemed great but within a year have required a spend of almost as much as they cost to buy. And there seem to be some reasonable low miles models which with a warranty should offer the reliability at not too great a price.

Transformers

Why does she NEED a car?

Many people manage without one.

She currently has no earned income and £8k of debt - shouldn't buying a car be way, way down a list of things to do? Surely getting some emergency savings first would be a better idea.

Angry_Bear

Have her fill in a statement of affairs using her current figures and back-in-work earnings. Then at least she'll have a realistic idea of what she can afford for repayments (try this one: http://www.stoozing.com/calculator/soa.php ).

I really would try to avoid one of these guaranteed credit places, they're usually complete rip-offs and I'd bet that whatever terms she gets will still be more than she can afford if she only has £500 a month to live on!

One potential option might be a long-term leasing deal, although she may fail the credit check, I'm not sure what they do. You can potentially get a small car for under £90 on a 4-year lease. You don't get the car at the end, but at least you've got reliable motoring if you're not the sort of person who can keep a banger going. I don't really know that much about these deals, but it may we worth considering if her SOA shows that it could be afforded.

glvr

Transformers wrote: »

Why does she NEED a car?

Many people manage without one.

She currently has no earned income and £8k of debt - shouldn't buying a car be way, way down a list of things to do? Surely getting some emergency savings first would be a better idea.

She lives rural, and can't afford to move.
Needs to get her son to a school 8 miles away for which there's no bus and a school move isn't possible.
To work to be able to earn to improve herself requires car transport so she can also do the school and other stuff.
No, a car is an important thing to have - something which can be used now to help improve her future and in dealing with the crisis now is hence better than savings for an emergency which might not happen.

glvr

Angry_Bear wrote: »

Have her fill in a statement of affairs...

I really would try to avoid one of these guaranteed credit places, they're usually complete rip-offs...

One potential option might be a long-term leasing deal...

Thanks. :-)