Car loan needed - have defaults

Austinhead

Hi,

I have an 11 year old car, which is expensive to run and is costing me increasing amounts to keep it on the road.

Without going into loads of detail, I had some financial problems a few years back, which caused defaults on my credit file. I'm happy to report that i have been paying towards all my debt for the last 4.5 years and am now in a position to offer full and final settlement to them all.

I want to take out a loan to enable me to buy another car, the car i have does only about 30mpg, costs around £250 in road tax and has cost me far too much to pass an MOT and to generally keep on the road over the past 18 months.

I signed up to Experian a couple of weeks ago and was encouraged to see that I had an 80% chance of acceptance for a loan with HSBC to get a car. Today, i did the same search again, and it hasn't appeared on the list, in fact no one has appeared as a likelihood of acceptance.

Does anyone have any idea why this might be case ?

More importantly, can anyone offer any advice on who I might approach in order to get a loan ?. The car I am looking at does double the mpg and has a £20 car tax, this coupled with the reduced mechanical costs would mean the overall cost per month would only be around £50.

My car is out of MOT in August so i'm trying to avoid the possibility of having to spend yet more on it.

Thanks in advance.

Ebe_Scrooge

You say you have defaults, and you're now in a position to make "full and final settlement" - I assume by that you mean that it's an agreed sum to cancel the debt, but not the full sum you actually owe ? If that's the case, I'm afraid you've got almost zero chance of being offered further credit. Look at it logically - you've already demonstrated that you've failed to repay several debts, so who is going to be prepared to lend you more money, knowing that you're highly likely to avoid repaying it. That's not me being judgemental, by the way, I'm just pointing out that this is how a lender will see it.


I appreciate what you're saying about the reduced running costs saving you money overall, unfortunately that's not what a lender is interested in - they just look at the facts on your credit history.


If you really want a loan then your bank is the best place to start, or possibly dealer finance. But I'd hazard a guess that you'll be most unlikely to be offered credit, or if you are it will be at a very high rate of interest ( as you'll be seen as a high risk ).


Other than that, I'm afraid all I can suggest is keep the current car going for as long as you can, in the meantime save every penny you can towards a new one in a year's time. Not easy I know, especially when funds are tight. But cars are an expensive business at the best of times And a "new" car doesn't need to cost £10,000, it's possible to buy a very reliable small car for a fraction of that price if you take your time and look around. It may not be the best looking or most desirable model, but if, like me, you value function over form when it comes to cars then there are some good deals to be found.


Sorry for the waffling, but I hope some of the above is useful.

CLAPTON

Austinhead wrote: »

Hi,

I have an 11 year old car, which is expensive to run and is costing me increasing amounts to keep it on the road.

Without going into loads of detail, I had some financial problems a few years back, which caused defaults on my credit file. I'm happy to report that i have been paying towards all my debt for the last 4.5 years and am now in a position to offer full and final settlement to them all.

I want to take out a loan to enable me to buy another car, the car i have does only about 30mpg, costs around £250 in road tax and has cost me far too much to pass an MOT and to generally keep on the road over the past 18 months.

I signed up to Experian a couple of weeks ago and was encouraged to see that I had an 80% chance of acceptance for a loan with HSBC to get a car. Today, i did the same search again, and it hasn't appeared on the list, in fact no one has appeared as a likelihood of acceptance.

Does anyone have any idea why this might be case ?

More importantly, can anyone offer any advice on who I might approach in order to get a loan ?. The car I am looking at does double the mpg and has a £20 car tax, this coupled with the reduced mechanical costs would mean the overall cost per month would only be around £50.

My car is out of MOT in August so i'm trying to avoid the possibility of having to spend yet more on it.

Thanks in advance.

given the details you provide, I'm surprised any main stream bank would consider you are a loan: however no harm in trying.
a HP type loan might be easier to get or buying a cheap car with your savings
how much do you want to borrow?
how much do you earn?
how much do you owe already?

poppasmurf_bewdley

So basically, you can now afford to get yourself out of long standing debt, and straight away want to jump headlong into more debt by getting a car loan.

It will be far cheaper for you to keep your present car running or buy a bargain banger.

As I said on another thread this week, which is cheaper? £1000 on car repairs or £250 per month over three years?

If you are lucky enough to get a loan, you will be paying horrendous interest rates.

bengalknights

Your best bet might be to use pcp or HP schemes from the dealers as they tend to be more favourable to adverse credit records

Austinhead

The one I was looking at would cost £160 a month, by my estimations I would save £100 a month on fuel and car tax, so when you add into the mix how much I have spent in repairs to my current car over the last 12 months, the difference per month, is negligible.

So your comments "It will be far cheaper for you to keep your present car running or buy a bargain banger." isn't strictly true, but yes, i am suggesting getting back into debt.

Pixie5740

HSBC are one of the most pernickety lenders so if your credit history is somewhat checkered then they're not the best choice of lender for you.

If you're hellbent on buying a car on finance I'd say you stand a better chance of being accepted for finance which is secured on the car, so finance through the dealer. If you get finance from a dealer then you should be able to negotiate something off the price of the car.

poppasmurf_bewdley

Austinhead wrote: »

The one I was looking at would cost £160 a month, by my estimations I would save £100 a month on fuel and car tax, so when you add into the mix how much I have spent in repairs to my current car over the last 12 months, the difference per month, is negligible.

So your comments "It will be far cheaper for you to keep your present car running or buy a bargain banger." isn't strictly true, but yes, i am suggesting getting back into debt.

The money you have spent (marked above) is dead and gone, so there is no point in adding it to future costs of buying a new car to try and make it seem that buying a new car will have negligible costs. Those are the economics of the madhouse.

If you look at finance in that way, maybe that's how you got into trouble in the first place.

Any way of buying a new car will mean spending more money than keeping your present car - money that you do not yet have.

Austinhead

Maybe, but i have no reason to imagine that my current car is not going to continue to cost money to maintain. My MOT is due in August so time will tell. Oh and for clarity I am not talking about fuel, brakes, tyres etc which I understand are an ongoing cost of any car.

My current car is 11 years old with £120,000 miles on the clock.

Gaz83

Presumably by offering full and final settlements, you aren't paying all of the amounts you owe, and are now looking to jump straight back into debt?

That's crazy.

Austinhead

Gaz83 wrote: »

Presumably by offering full and final settlements, you aren't paying all of the amounts you owe, and are now looking to jump straight back into debt?

That's crazy.

Just out of interest, at what point would you consider it to NOT be crazy ?