Car & Kitchen Loan

freeman3030

Hi all, this is a long one:
I'm just wondering how others would tackle our situation. We purchased a new house last October. The property needed a complete overhaul and we've done most of the work except, re carpeting upstairs (we've got bare floorboards at the minute), relocating the downstairs loo and removing a couple of walls to increase the size of the kitchen, and to then install a new kitchen. Once that's done, we can replace the hallway flooring. Then, the house will be complete!
However, our car has now decided to go all funny on us - typical! Out of nowhere all these little electrical glitches have all come at once and we'd really like to get a new car - we've had it for nearly 8 years and we're now commuting further for work (fortunatly we both work for the same company) we would be better off with a diesel. We don't want to be in a situation where good money is chasing bad, so would ideally like to replace the car.

We have 2 x 0% purchases credit card which we've used to get the house to this point:
Tesco 0%: £200 per month (last payment next month)
Sainsburys 0%: £1,900 balance. We pay £100 per month as there's 19 months left interest free.

I'll cancel the Tesco CC once the final payment is made. We can cope with the house the way it is for the time being, but as we've been thinking about taking out a loan for a new car, we could borrow a bit extra and finish the house off too.

I've seen a car which we both quite like which is £13,000. I don't know how much our current car is worth but I'd imagine around the 3k mark. I would estimate the work on the house to be around 10k so would need 20k for the lot (my dads a builder so we only have to pay for materials).

As we don't need the house work done straight away, I thought about taking a loan for the car, and when we want the house done, take out another loan or using a 0% finance deal when one comes around with a kitchen supplier. But if we go down the 2 loans route, we might end up with paying more interest. How would you go about it all?
We've got around 3k in savings, but don't want to touch it in case we need emergency cash.

Please share your thoughts,
Many thanks.

redpete

If you get a new car it will start losing money (depreciation) straight away. Will this be more than you might spend keeping your existing car running?

[Deleted User]

Why spend 13k on a car? you could get a perfectly reliable diesel car for around 4-5k? then do the house bit by bit as and when you have the spare cash.Borrowing 20k wouldn't be easy and it would be a big one to repay, maybe in a couple of years time your mortgage lender would advance more money at a sensible interest rate?

freeman3030

Yeah I know, we will suffer more in depreciation than we will by paying to fix any potential issues we have, but there will always come a point where we will need to upgrade the car and will have to suffer depreciation.
I love cars and relish the idea of a new one all of the time. I personally would rather buy a relatively new car, run it for a number of years (hopefully hassle free) then when the problems begin, change it for a newer one. I know it's not the most cost effective way of motoring, but I like having a nice new shiney car with the latest gadgets etc. I don't drink or smoke so view it as a bad habit.
I also understand what you're saying venison, I would only upgrade the car to something I want, rather than something I need. I mean, realistically we can carry on with our current car and fix any issues etc. But it just seems like an oppourtunity to get a new one.
With regards to an advance in a couple of years with our mortgage lender - I hadn't even thought about that! So will have a chat with my sister in law as she was out mortgage advisor and see what she suggested!

foxy-stoat

I would steer clear of turning unsecured debt to to secured, leave the equity in your house.

Just get the best rate you can and borrow as much as you need to get the car you want, if you can get a low rate money transfer then do that, barclays or virgin do them as well as others.

You should be able to juggle 0% balance transfers for as long as you need to if you plan to pay them down and not spend on them, assuming you have good credit record.

Bookworm22

I lease my 16 plate 7 seater, no tax, no mot and free breakdown cover for £260 month and no deposit.I only took it for over 2 years then I will renew again, it doesn't suit most but it does our family. If you like a new car every few years this may be an option for you.