Salary Sacrifice Car Scheme Effect on mortgage

moneycantbuyyouhappiness

Ok so car is in for an oil change today. Only 4k miles after its last service :mad:

Anyway the garage says there are a lot of other bits that will need doing eventually.

So it needs another £200 of work today. Totted it up and it has cost me around £1200 this year for repairs, services, tyres and to get it through its MOT.

MOT/Service is due in Feb at the rate its going I really doubt it will fly through.

I have had a look and I could probably sell it for around £4500. Me and the OH are looking to buy a house next year and I just wanted to know would a salary sacrifice car scheme to lease a car (around £200 pcm which includes everything apart from Fuel) drastically affect our affordability. Our joint income is around £3000 pcm.

I would pay off my debt with the money from the car and then put much more into savings, so we would end up with an extra £4000ish towards a deposit.

Any ideas, I'm really not sure what's the best thing to do, this car feels like a money pit!

Brightspark87

Hi

Just as someone who is an IFA but works with mortgage guys - the net salary is what is used now rather than gross so it shouldn't have a huge affect on your borrowing as they would look at that commitment if it came out before or after tax in the same way!

Of course, best thing to do would be not to get the new car and seeing as youve paid so much out what is likely to go wrong next?

moneycantbuyyouhappiness

Thanks Brightspark.

That is my initial feeling too but i'm terrified it will need so much more work done in Feb for the MOT.

The back box will soon need replacing (we knew about this), shock absorbers have started to leak so will need replacing soon. Brakes have been advised to be replaced all around. On the quote I was given by the garage it was almost £1000 to complete all the work but I decide to only get the oil change and the gearbox seal sorted, £160 and I've ordered new wipers (desperately needed) at £30.

Brightspark87

ah, shame but still £1000 of work cheaper than a new one!

But always worth speaking to an independent mortgage broker they can guide you on this. all depends on overall affordability really so if the mortgage is say £750 a month (c£150k 25% loan to value) then it shouldnt be an issue. If its tighter than this it may causes problems.

Have you got an agreement in principle yet? Looked the affordability calculators? If not do so and have a play around might help

EssexHebridean

I'm surprised that a car that you could still sell for £4,500 is requiring that much work? Some of what you've mentioned - brakes, tyres etc - is depreciation of course - do you save a sum monthly to cover those sort of costs? Things like tyres in particular shouldn't really come as a "surprise" to be honest.

If you think that the car is genuinely one that just has "issues" - what used to be referred to as a Friday afternoon car - then one solution would be to sell it and replace with something else used - a quick Autotrader search suggests that you could potentially get something as new as a 63 plate and low (10k) mileage for the sort of money you'd get for yours. Bought from a dealer you'd probably have some warranty on that, too.

andyfromotley

I think you may be doing that clasic trick of talking yourself into a new car.

Very few cars are going to cost you an average of £200 month in month out in repair bills. You would have to be extraordinarily unluck for this to be the case month in month out year after year.

Think long and hard and about this because you will be stuck with the car lease month in month out come hell or high water.

First thing i would do is ask another garage for a quote.

moneycantbuyyouhappiness

Thanks for your replies all. I bought the car when I was doing much longer trips and have been blighted by DPF issues since. It had new tyres in December and those same tyres have just needed replacing (The 'toe' was out and so they had worn unevenly on the insides). Brakes were done March for the MOT.

I don't particularly want a new car as the new ones would still be a bit of a downgrade compared to the one I currently have (cheaper car brand new, if that makes sense?). I just feel like I am paying out a lot for it and had quite a run of bad luck with it. I wondered if the extra savings would 'look' better.

Anyway we have decided to re evaluate in March when it needs its MOT. I'll take it to a different garage and see if that helps.

Muhren

Can I ask what car you are going for that costs £200 a month?

I have just ordered a car through work that is going to cost me below £60 a month, granted it is quite small but should be fine for me.

My current car costs around £1500 a year to keep on the road whereas this one will be less than half that. Plus it will be better on fuel as well.

Can you look at something that is going to cost you less than £200 a month to lease?

January2015

Muhren wrote: »

Can I ask what car you are going for that costs £200 a month?

I have just ordered a car through work that is going to cost me below £60 a month, granted it is quite small but should be fine for me.

My current car costs around £1500 a year to keep on the road whereas this one will be less than half that. Plus it will be better on fuel as well.

Can you look at something that is going to cost you less than £200 a month to lease?

What car are you getting? Interested to know what you can get for such a low price. Many thanks

Muhren

January2015 wrote: »

What car are you getting? Interested to know what you can get for such a low price. Many thanks

Seat Ibiza, there are of other cars around this price as well, some even cheaper. I think you can get a Ford Fiesta for around £30 a month.