Car finance

Caz3121

If you take a loan in your name it will be treated as your loan and liability irrespective of what private arrangement you have.
The loan will appear on your credit report and will be a consideration with any future borrowing and affordability calculations
As a rough guide, consider debt to income ratio of 50%....income £30k, car loan for mum...£15k would mean it would be difficult to get more debt if you needed it

dsme94

Caz3121 wrote: »

If you take a loan in your name it will be treated as your loan and liability irrespective of what private arrangement you have.
The loan will appear on your credit report and will be a consideration with any future borrowing and affordability calculations
As a rough guide, consider debt to income ratio of 50%....income £30k, car loan for mum...£15k would mean it would be difficult to get more debt if you needed it

That doesn't make sense as plenty of people have cars worth more than their annual salary?

jellie

dsme94 wrote: »

I can afford it but I don't want this to have a negative impact on my ability of obtaining finance for my own car, which is why I need this advice.

It WILL have a negative affect on your ability to obtain further credit - the loan you take out for your mum's car will be your responsibility and your's alone. It will be on your credit records as being your loan and this is how any lender you approach for your car loan will see it - they will not care that your mum has agreed to pay you back.

How will you feel if your mum's financial circumstances change again and you end up having to make the repayments for the loan, while she's still driving around in the car?

Or you take out this loan for her car and can't then get a loan for your own car because of it?

forgotmyname

People have cars worth more than their salary because they put down large deposits?

Her financial situation has changed and there is a chance of it changing again before you have paid for the car. Happens a lot and it happened to me.

You dont want it to affect getting a loan for a car yourself but it likely will.

The car will be old and possibly need repairs before the final payment has been made. Unless your only keeping it for a year or a very low mileage. Even then there is risk of punctures and other small jobs that wont be covered under a warranty.

Cars cost money whether its old or new, I have been OK with cars costing approx £2000. Saved me a fortune in depreciation. And repairs have been neglible.

redpete

dsme94 wrote: »

I can afford it but I don't want this to have a negative impact on my ability of obtaining finance for my own car, which is why I need this advice.

As far as any lender is concerned you are taking out a loan for£xk, this will be taken off the maximum debt that a future lender thinks you can afford.