Car goosed but can't get credit

Underachiever

Hi all,

Long time reader, first time poster

I'm hoping for some advice, my current car (2010 Vauxhall Corsa) has broken down, this is the third (maybe fourth) time in recent months and the mechanic bills are starting to make it an over priced expense.

I'd like to be able to get a new car to replace the Corsa but I have several problems, first is that the car is in negative equity, I still have two years remaining on the original finance agreement and the cars value is only around 2/5ths of what's owed on it. My second problem, and the more serious one is that my credit score is so low because of a bad credit history (I'm 2 years into a DMP) meaning that I'm unable to gain credit anywhere to finance the new car.

Are there any options available to me or am I stuck for the next "X or Y" amount of years with the cursed Corsa as I'll be unable to finance anything until all those nice little red dots disappear from my credit file? (How long does this usually take? As from what I've read it takes 6 years, so if I receive these marks against me each month, when I finish paying my DMP will I then have 6 years to go until the last one is gone?).

Thanks a lot,

January2015

Underachiever wrote: »

Hi all,

Long time reader, first time poster

I'm hoping for some advice, my current car (2010 Vauxhall Corsa) has broken down, this is the third (maybe fourth) time in recent months and the mechanic bills are starting to make it an over priced expense.

I'd like to be able to get a new car to replace the Corsa but I have several problems, first is that the car is in negative equity, I still have two years remaining on the original finance agreement and the cars value is only around 2/5ths of what's owed on it. My second problem, and the more serious one is that my credit score is so low because of a bad credit history (I'm 2 years into a DMP) meaning that I'm unable to gain credit anywhere to finance the new car.

Are there any options available to me or am I stuck for the next "X or Y" amount of years with the cursed Corsa as I'll be unable to finance anything until all those nice little red dots disappear from my credit file? (How long does this usually take? As from what I've read it takes 6 years, so if I receive these marks against me each month, when I finish paying my DMP will I then have 6 years to go until the last one is gone?).

Thanks a lot,

If you are on a DMP you have the option to drop to token payments for a couple of months to cover the repair costs of the corsa. If you are with a DMP provider, e.g. StepChange, just give them a call and explain the problem. They are usually very supportive.

To be honest it is probably better the devil you know regarding the car. You've spent money on it and at least you know those bits are not likely to let you down in the near future. You won't get finance (and if you do it will be through the nose rates and you will be breaching your DMP). So unless you can save, or borrow from a relative (not really a good idea) you are stuck with the corsa.

2010 is not old for a car - many on DMPs have cars 15 years old or more.

Probably not what you wanted to hear, but that's how it is.

Underachiever

January2015 wrote: »

If you are on a DMP you have the option to drop to token payments for a couple of months to cover the repair costs of the corsa. If you are with a DMP provider, e.g. StepChange, just give them a call and explain the problem. They are usually very supportive.

To be honest it is probably better the devil you know regarding the car. You've spent money on it and at least you know those bits are not likely to let you down in the near future. You won't get finance (and if you do it will be through the nose rates and you will be breaching your DMP). So unless you can save, or borrow from a relative (not really a good idea) you are stuck with the corsa.

2010 is not old for a car - many on DMPs have cars 15 years old or more.

Probably not what you wanted to hear, but that's how it is.

Hey,

Thanks for the reply, I don't need to suspend my payments to pay for the mantinance my concern is that with so many problems I'm only one malfunction away from a car that no longer runs and then face the problem of having the remainder of the finance to fund and no car to get to work

You would think that but it almost seems to be a monthly occourance, it's even become a joke amongst friends/family/co-workers about the sheer amount of problems the car seems to have so I'm going to say I've been sold a dud as clearly it shouldn't be spending this amount of time/money to keep it on the road.

So there's nothing I can do really?

lambda

How much is your car worth?

How much do you still owe on it?

What is total you've spent on repairs on the car in the time you've owned it?

I'm sorry, but I don't see how buying a new car is going to fix your problems.

If you have to take out a loan to buy a new car, it means you can't afford one.

Sorry to be blunt, but if you are already on a DMP, buying a new car is really something you don't want to be doing. Can't you just fix the thing? My car is 12 years old with 120,000 miles on it. Even after all the repairs, it is still WAY cheaper than buying a new car.

Underachiever

lambda wrote: »

How much is your car worth?

How much do you still owe on it?

What is total you've spent on repairs on the car in the time you've owned it?

I'm sorry, but I don't see how buying a new car is going to fix your problems.

If you have to take out a loan to buy a new car, it means you can't afford one.

Sorry to be blunt, but if you are already on a DMP, buying a new car is really something you don't want to be doing. Can't you just fix the thing? My car is 12 years old with 120,000 miles on it. Even after all the repairs, it is still WAY cheaper than buying a new car.

Hey,

Thanks for the reply

Car is worth under £2k with just over £5k outstanding in finance

Since last summer I've had the standard MOT/Full Service and new Tyres (as expected), additional to this I've had to have the exhaust system replaced which cost £325 parts/labour, coil pack sensor £130 parts/labour, oil pump and oil pump sensor £175 parts/labour and head gasket with timing chain for £550 parts/labour which doesn't sound an awful lot to most people but while trying to manage my other monthly bills, keeping on top of my agreed DMP payment and everything else it's stretched my finances to their limit and everything I had in "savings" has now gone so the next fault will most likely result in the car being off the road or me having to take on more debt to keep it running.

I was under the impression that the majority of cars on the road were under finance, now that I think of it, I don't know a single person who "owns" their car, all are through different forms of finance. Maybe I'm missing something? Or maybe you are as I doubt every car you pass/see is owned and is most likely on some type of finance.

Well that depends, I pay £215pcm for my Corsa, in the last 6 months it has cost an additional £60 MOT, £160 Full Service, £30 Road Tax, £1180 in repairs and £160 for tyres. So that's £2880 in 6 months.
A new Citroen C1 is £129 deposit, £129pcm with free Road Tax and Servicing, so that's £903 in 6 months, so around £2000 difference over the last half year which I think we can both agree means that a new car would in fact be MUCH cheaper than my current situation.

Grumpelstiltskin

Underachiever wrote: »

Hey,

Thanks for the reply

Car is worth under £2k with just over £5k outstanding in finance

Since last summer I've had the standard MOT/Full Service and new Tyres (as expected), additional to this I've had to have the exhaust system replaced which cost £325 parts/labour, coil pack sensor £130 parts/labour, oil pump and oil pump sensor £175 parts/labour and head gasket with timing chain for £550 parts/labour which doesn't sound an awful lot to most people but while trying to manage my other monthly bills, keeping on top of my agreed DMP payment and everything else it's stretched my finances to their limit and everything I had in "savings" has now gone so the next fault will most likely result in the car being off the road or me having to take on more debt to keep it running.

I was under the impression that the majority of cars on the road were under finance, now that I think of it, I don't know a single person who "owns" their car, all are through different forms of finance. Maybe I'm missing something? Or maybe you are as I doubt every car you pass/see is owned and is most likely on some type of finance.

Well that depends, I pay £215pcm for my Corsa, in the last 6 months it has cost an additional £60 MOT, £160 Full Service, £30 Road Tax, £1180 in repairs and £160 for tyres. So that's £2880 in 6 months.
A new Citroen C1 is £129 deposit, £129pcm with free Road Tax and Servicing, so that's £903 in 6 months, so around £2000 difference over the last half year which I think we can both agree means that a new car would in fact be MUCH cheaper than my current situation.

You haven't factored in the fact that you will still be paying for the Corsa. You admit it is in approx. £3000 negative equity so how are you going to pay that?

lambda

Underachiever wrote: »

Hey,

Thanks for the reply

Car is worth under £2k with just over £5k outstanding in finance

Since last summer I've had the standard MOT/Full Service and new Tyres (as expected), additional to this I've had to have the exhaust system replaced which cost £325 parts/labour, coil pack sensor £130 parts/labour, oil pump and oil pump sensor £175 parts/labour and head gasket with timing chain for £550 parts/labour which doesn't sound an awful lot to most people but while trying to manage my other monthly bills, keeping on top of my agreed DMP payment and everything else it's stretched my finances to their limit and everything I had in "savings" has now gone so the next fault will most likely result in the car being off the road or me having to take on more debt to keep it running.

I was under the impression that the majority of cars on the road were under finance, now that I think of it, I don't know a single person who "owns" their car, all are through different forms of finance. Maybe I'm missing something? Or maybe you are as I doubt every car you pass/see is owned and is most likely on some type of finance.

Well that depends, I pay £215pcm for my Corsa, in the last 6 months it has cost an additional £60 MOT, £160 Full Service, £30 Road Tax, £1180 in repairs and £160 for tyres. So that's £2880 in 6 months.
A new Citroen C1 is £129 deposit, £129pcm with free Road Tax and Servicing, so that's £903 in 6 months, so around £2000 difference over the last half year which I think we can both agree means that a new car would in fact be MUCH cheaper than my current situation.

Right. Even if you sold it, you'd still owe 3k. So you buy a new car. Let's say it costs 12,000. So now you owe 15,000. How does that make your situation any better? The only difference is, OK, you may not have to repair the car as much, but you now owe a ton of cash to a finance company. How does that make your situation better? Short answer: it doesn't.

Surely it's better just clearing the finance on the car as it is? then get rid of it if it a cash cow and buy something else out right with money you have saved up?

I think the only sensible option is for you to keep your car and run it into the ground, or until you have cleared what you owe on it and have some money saved to buy something better. Put some money away each month to repair it.

Your example also doesn't include the term of the finance. If you borrow £129 over 6 years say, that's £9928 (not including interest!!). You are better off keeping your car, paying the 5k still owed. You are not going to be paying 4k of repairs on it.

Most people may buy cars on finance but that doesn't mean that they can afford it. I've learnt this lesson the hard way, and I will never buy a car on finance again. I will only buy it outright in cash I have saved up. If you have to borrow money to buy something, then it means you can't afford it. If you are on a DMP, then that says to me that you certainly can't afford it... sorry.

theoretica

Underachiever wrote: »

I'm only one malfunction away from a car that no longer runs

Surely that is the case with every car?

Do you have a mechanic you trust who can tell you if these things are just bad luck all happening at once or might have some root cause? Because if they are just 'these things happen' then there is no reason another car should be better, and as mentioned you know this car has a lot of new bits. Or you could try asking the motoring board here.

Underachiever

Grumpelstiltskin wrote: »

You haven't factored in the fact that you will still be paying for the Corsa. You admit it is in approx. £3000 negative equity so how are you going to pay that?

That would be carried to the new finance agreement, isn't that how it works? I've never heard of anyone with two lots of finance when getting a car? Maybe I'm mistaken?

Underachiever

theoretica wrote: »

Surely that is the case with every car?

Do you have a mechanic you trust who can tell you if these things are just bad luck all happening at once or might have some root cause? Because if they are just 'these things happen' then there is no reason another car should be better, and as mentioned you know this car has a lot of new bits. Or you could try asking the motoring board here.

Well no not really, my friends BMW broke down, the car was new and under warranty, the dealership provided him with a courtesy car while they fixed his under warranty and then he collected his car once the work was done.

My mechanic just says it's bad luck plus most new cars are built to accommodate a "throw away society" so they don't seem to last, he sees problems now on 5-6 year old cars which wouldn't be expected until the car was 10+. If I have any other fault with the car I no longer have the money to repair it as all of my savings are gone

Ilona

Underachiever wrote: »

I was under the impression that the majority of cars on the road were under finance, now that I think of it, I don't know a single person who "owns" their car, all are through different forms of finance. Maybe I'm missing something? Or maybe you are as I doubt every car you pass/see is owned and is most likely on some type of finance.

it has cost an additional £60 MOT, £160 Full Service,

Hi. Can you shop around for your servicing and MOT. The last two MOT's I have had were £30 each, booked online at Halfords. They also do a cheaper rate for service and MOT together.

You now know one person who owns her own car. A year ago I changed my car. I had been saving for it for three years, added to the part ex, I was able to upgrade to a newer car. I am now saving for the next one, which I will be buying in about 2 - 3 years time.

Can you cut down your spending elsewhere so you can put money away for a car? Can you earn any more, overtime, or change job? It is a daft idea to get a new car when you still have to pay for the old one. You can't afford two cars.
Ilona