Need to buy a Car

Punked_2

This is hard to explain and I dont know if it will actually make any sense.

I have a loan with Egg for £13k at a rate of 7.9% over 4 years for which I pay £369 a month (this was taken out about 4 months ago).
I have 12k cash in my bank(not from the loan) to buy a car for work purposes.
Ive been looking at some of the main dealers at the moment and quite a lot of them are offering 0% APR over 3 or 4 years on new car purchases (some with no deposit needed) and with payments of around £250 a month or less.
Am I wiser to put the money towards paying the loan off now and buying the car on the 0% Finance which is more or less a free loan or buy the car with the available cash?
Obviously the car will depreciate over a number of years and inevitably I will loose money on it but at least I will be getting the use out of it
The 13k is currently my only remaining debt other than my mortage.

Any advice appreciated.

iwanttobreakfree

i would have thought that the car is more expensive to cover the 0% in the first place.

get on the net find out the cheapest you can get this car and then walk into the car dealers with this info and tell them you want the car as near to that price as possible. Thats what I did - they hated it but I got a good deal.

Punked_2

iwanttobreakfree wrote: »

i would have thought that the car is more expensive to cover the 0% in the first place.

get on the net find out the cheapest you can get this car and then walk into the car dealers with this info and tell them you want the car as near to that price as possible. Thats what I did - they hated it but I got a good deal.

Ive compared prices and its not actually too bad. According to both Parkers & Whatcar the cars Im looking at are below their target price. Some are being heavily discounted up to 30/09/2007.
For example, certain Citroen cars come with up to £3000 cashback & 0%. Renault are offering 0% on the new Scenic and £1000 off + a free panoramic sunroof.
0% is also available at Vauxhall with money off aswell.

Punked_2

albertross wrote: »

if it is a new car, try here to compare prices.

http://www.dealdrivers.co.uk/

You'll get much better value with an older car though, and use the remainder to pay off debt

Thanks. How does that site work?

zzzLazyDaisy

All things being equal, I'd use the savings to pay off the Egg Loan and take the 0% finance.

Have you worked out how much extra you will pay in interest if you let the Egg Loan run its full course?

Punked_2

zzzLazyDaisy wrote: »

All things being equal, I'd use the savings to pay off the Egg Loan and take the 0% finance.

Have you worked out how much extra you will pay in interest if you let the Egg Loan run its full course?

About £2.2k in interest.

tomstickland

I'd pay off the loan as quickly as possible and meanwhile buy a car for, say, £2K.

Punked_2

albertross wrote: »

It is just an internet dealer/broker, the cars come direct from main dealers, and you pay the main dealer, so safe. It will give you an idea of a target cash price, and latest manufacturer offers.

I'm intrigued, where did the 12k come from, is it from an employer, or yours?

Its mine. :cool:

Jonesya

I'd second the suggest of a cheaper car - you could look at getting something say 3 years old that's still new enough such that's reliable and won't need a lot of money spending on it over the next 3/4 years with the first owner having covered the initial steep depreciation.

marty1888

Jonesya wrote: »

I'd second the suggest of a cheaper car - you could look at getting something say 3 years old that's still new enough such that's reliable and won't need a lot of money spending on it over the next 3/4 years with the first owner having covered the initial steep depreciation.

Good suggestion. Im thinking of buying a new car but dont want to take the hit on depreciation and VAT so will be looking at something 2nd owner.
Jonesya is right on this one. As long as its reliable you should be fine. Pay off the loan and buy something cheap.

marty1888

albertross wrote: »

if it is a new car, try here to compare prices.

http://www.dealdrivers.co.uk/

You'll get much better value with an older car though, and use the remainder to pay off debt

Thanks for that. Handy site.