Worried about car finance

Bubbles2401

Any advice would be appreciated.

I am 31 and looking to buy a used car from arnold clark. Hire purchase. £13000.

I have a £2000 deposit to put down and will pay the rest in monthly deposits.

I work around 25 hours per week earning around £850 a month and recieve working and child tax credits of £580 per month plus £82 in child benefit.

I have no morgage or rent to pay (house owned by family member) but pay all the usual household bills etc.

I have a excellent credit rating of 965. I have a small arranged overdraft with the bank of £250 and all past store cards etc are paid off. I have a unused vanquid credit card with a limit of £1000 and a next account with a limit of £5000. Both are at £0. The next account only recently paid off.

For the last 18 months ive never missed a single payment of anything. However 18 months ago when i had a accident i missed a couple of payments on the next account. This was soon sorted and account paid off.

3 years ago i had a online catalogue account and had a few missed payments. This account has been paid off for 3 years.

Im terrified these past missed payments will hurt my chances. Even with a excellent credit rating that ive worked hard to build.

Any advice?xx

[Deleted User]

Low income and missed payments makes you higher risk than you may like. Your credit score unfortunately is misleading, as it is irrelevant and not seen by lenders.

Having said that, finance secured on the vehicle is easier to get, as the lender has some security.

Perhaps look for a £2k car?

Bubbles2401

Ive had the same car for the past 12 years and its now deemed unsafe so i would ideally prefer to get a decent car that could last me....hopefully for another 12 years so i can get my moneys worth ��

Im hoping that because the missed payments were nearly 2 years ago...and on cleared settled accounts...i might not be punished too badly??

The rest of my financial history is great.

Could kick myself for the missed payments. Just never realised how dear it would cost me.

Salesman seems overly confident i wont get declined with a good credit rating (i know they are viewed at useless) and over a year of good payments (settled 4 store cards plus a large bank loan in that time) but i fear from reading on here that i dont stand a chance �� x

SeanG79

Car finance lenders generally look at the last 12 months (provided there are no unsettled defaults or CCJs), you should be OK.

Whether they approve £11k advance on your salary is another story.

thriftylass

Hiya,

I know you said you didn't have rent to pay which makes a difference. However, the car hire purchase is about a years wages (Never count CTC etc as certain income). We just bought a car for a the same amount but it's a third of our yearly income and thought it is a bit risky. Could you not get one for a bit less. How much are the payments? Have you got any other securities, how secure is your job etc?

foxy-stoat

What would be the repayments on that amount of credit?

Buy a £2000 car and pay the same amount of the loan into Premium Bonds or savings account. The £2000 car should last you at least a few years worth of savings, when it gets uneconomical to repair, use the savings and buy another one. Repeat.

I would not be fooled into thinking that a £13,000 car will last 12 years without spending out on large bills.

Bubbles2401

Thanks for the replys everyne...i appreciate it

In a month including tax credits and maintenance i take home £1681. The hire purchase monthly payments are £220 a month.

I got approved for my car finance today and pick up my new car on friday. I was approved instantly which i was surprised about but i think the large deposit helped.

Now ive got myself debt free (aside from the car!)...now its the time to budget and save. Something i havent done for many years xx

foxy-stoat

Hope it works out for you.

Gaz83

Good to see you took the advice of posters on board.

Bubbles2401

Believe it or not i have been considering and discussing this new car deal for well over a year going over all the options.

I asked for advice on my credit report and the likelyhood of getting fiance. NOT what loan or car people thought i should get.

So that advice was not needed or wanted.

I took on board the advice from the one person who answered my actual question.

Your sarcastic response is neither needed nor wanted.

Herzlos

You don't need to spend £13k to get a reliable car (especially when you're borrowing just over your annual salary after tax to do so).

You've got a £2k deposit + current car, so maybe have a look at around the £3-5k mark. Arnold Clark does a basics range starting about there (like this rather unglamourous Kia for £2k - http://www.arnoldclark.com/used-cars/kia/picanto/1-1-glamour-5dr/2005/ref/arnfw-u-6792). Or go private and see what you can get for cash.

As said, put the other £220/month into a savings account and use that to buy/repair your car.

Edit: Nevermind, I saw you bought one. The £13k?