Car Loan - To help or not to help

BaileyMoselle

My girlfriend, who is on the minimum wage as a care worker, surprised me last night by saying she is about to sign up for a brand new Nissan. 48 payments each of 200 pounds and can I help her with 1900 pounds for a deposit? Her existing car looks beat up but is very reliable. She works many many hours and can probably afford the repayments. I think it is crazy however. The salesman said the loan approval should be ok - I am skeptical because a few months ago she was declined a store card while I was with her. Should I assist with the deposit - or risk the inevitable wrath following denial? Your thoughts appreciated.

BaileyMoselle

Just to complicate things a bit - earlier on in the week she agreed to buy another car which is cheaper. She has a letter saying she signed up for the finance (12k). She wants to cancel this one and purchase the new Nissan. I told her she can't simply cancel a finance agreement but she insists she did not sign anything. So I am confused.com about that one.

bengalknights

There is a 14 day cooling off period for all finance agreements

On top of this as the security is against the vehicle the chances of getting credit are high

BaileyMoselle

bengalknights wrote: »

There is a 14 day cooling off period for all finance agreements
high

I didn't realise that. Sure I can see the logic behind it but an agreement should be an agreement. But maybe that is just old school thinking.

Clive_Woody

BaileyMoselle wrote: »

My girlfriend, who is on the minimum wage as a care worker, surprised me last night by saying she is about to sign up for a brand new Nissan. 48 payments each of 200 pounds and can I help her with 1900 pounds for a deposit? Her existing car looks beat up but is very reliable. She works many many hours and can probably afford the repayments. I think it is crazy however. The salesman said the loan approval should be ok - I am skeptical because a few months ago she was declined a store card while I was with her. Should I assist with the deposit - or risk the inevitable wrath following denial? Your thoughts appreciated.

£11,500 is a lot for someone on minimum wage to pay for a car.

• Does she have other bills too or any kind of emergency fund?
• Can she afford the insurance and running costs on this new car?
• Is this really the total amount or is this a PCP deal where there is also a big final payment that comes when the 4 years is up?
• Has she drawn up any kind of budget to confirm she can keep up the payments (does she have regular working hours)?
• Can you afford to lose £1900 if things end between you and your girlfriend?

iolanthe07

Depends on how much you love her and how long you think the relationship will last, but in any case I would regard the £1900 as a gift rather than a loan.

Pixie5740

Will your girlfriend own the car after 48 months or will there be a balloon payment due?

foxy-stoat

Take a look around some of the threads on here about getting out of PCP agreements. Find out at what point does she reach the 50% of the total amount of the purchase price - that will be the earliest she can terminate the agreement if she will ever need to.

BaileyMoselle

[*]Does she have other bills too or any kind of emergency fund?

No emergency fund and standard council rent and utility bills.

[*]Can she afford the insurance and running costs on this new car?

Yes cheaper than her existing car she said.

[*]Is this really the total amount or is this a PCP deal where there is also a big final payment that comes when the 4 years is up?

Must be the latter as the figures don't add up.

[*]Has she drawn up any kind of budget to confirm she can keep up the payments (does she have regular working hours)?

No she is not really that calculating with money.

[*]Can you afford to lose £1900 if things end between you and your girlfriend?

Yes

BaileyMoselle

iolanthe07 wrote: »

Depends on how much you love her and how long you think the relationship will last, but in any case I would regard the £1900 as a gift rather than a loan.

Yes I always view loans to friends in that light - non boomerang

Pixie5740

BaileyMoselle wrote: »

Must be the latter as the figures don't add up.

I assume you're replying to me with that one...?

I thought there would be a balloon payment as £1,900 + (48 * £200) wouldn't buy you a brand new Nissan even if the interest was at 0%.

How will she make the balloon payment? If she can't pay then her options will be to hand back a car after shelling out £11.5k (ouch) or trading it in for another new car and starting the whole cycle again.

I think it's a daft idea and that your gf needs to be more realistic about what she can afford. No way would I purchase a depreciating asset over a 4 year period.