Car Finance/Lease With Defaults?

Mylo0811

So when I was younger, I was a complete tool with money. Long story short, I have about 6 defaults on my file. I'm currently on a Debt Management plan, with only about £7,000 left to pay off. Still a fair amount but I'm getting there.

My issue is, my current car averages about 30mpg (even less on short journeys), costs £290 a year to tax, and given it's 11 years old needs things doing every now and then. With my commute set to increase from 6 miles to 64 miles (round trip) next year, a more economical car would be ideal.

I know leasing a new car or buying a fairly new car would be cheaper. £0-£30 tax, 50+mpg and no repair bills would save me a fortune.

But will anyone give me credit, or lease me a car?

I earn £30,000 a year and affordability isn't the issue. But I don't want to walk into a showroom to be declined as I find it rather embarrassing. I also don't want to apply, to be declined and ruin my file even more. There are so many places that guarantee finance, but this can't be true, surely?

Anyone able to tell me if I'm likely to be able to get a car, anywhere?

jonesMUFCforever

If you are on a DMP are you allowed to ask for further credit?...and yes a lease agreement is asking for credit even if you never own the car.

A lot of it will depend on what exactly is on your credit report.

As a bye if affordability is not an issue why have you not increased your DMP payments to get rid of the debts or have you got any savings?

takman

Alan16ac wrote: »

So when I was younger, I was a complete tool with money. Long story short, I have about 6 defaults on my file. I'm currently on a Debt Management plan, with only about £7,000 left to pay off. Still a fair amount but I'm getting there.

My issue is, my current car averages about 30mpg (even less on short journeys), costs £290 a year to tax, and given it's 11 years old needs things doing every now and then. With my commute set to increase from 6 miles to 64 miles (round trip) next year, a more economical car would be ideal.

I know leasing a new car or buying a fairly new car would be cheaper. £0-£30 tax, 50+mpg and no repair bills would save me a fortune.

But will anyone give me credit, or lease me a car?

I earn £30,000 a year and affordability isn't the issue. But I don't want to walk into a showroom to be declined as I find it rather embarrassing. I also don't want to apply, to be declined and ruin my file even more. There are so many places that guarantee finance, but this can't be true, surely?

Anyone able to tell me if I'm likely to be able to get a car, anywhere?

What makes you so certain a new car will save you money?. Let's say you save £600 a year in fuel (a high estimate) and £290 a year in tax, so a total of £890 a year. A new car usually looses 50% of its value in its first three years so let's say about £8000, or £2600 a year.
Are you really saying that repairs to your current car are costing more than £1820 a year?. New cars are not a way to save money!

Mylo0811

jonesMUFCforever wrote: »

If you are on a DMP are you allowed to ask for further credit?...and yes a lease agreement is asking for credit even if you never own the car.

A lot of it will depend on what exactly is on your credit report.

As a bye if affordability is not an issue why have you not increased your DMP payments to get rid of the debts or have you got any savings?

Yes, and no. I couldn't take out loans and credit cards. But I can have an allowance for my transport/car. And yes I know a lease is still credit.
I could increase it, but it is being paid off, and will be paid off within two years. I can live comfortable now. To increase it would just make life miserable.
I don't intend on spending more on the running costs of my car overall.

takman wrote: »

What makes you so certain a new car will save you money?. Let's say you save £600 a year in fuel (a high estimate) and £290 a year in tax, so a total of £890 a year. A new car usually looses 50% of its value in its first three years so let's say about £8000, or £2600 a year.
Are you really saying that repairs to your current car are costing more than £1820 a year?. New cars are not a way to save money!

Monthly car costs based on commute being 64 not 6 miles.

VED - £25.37
Commuting 1376 miles per month.
Commute to and from Christies twice a week 860 miles per month.
Days off visiting family, shopping etc 400 miles per month.
Total miles - 2636 miles
2636 at 30mpg and fuel at £1.15 a litre = £459.37

Monthly costs based on a Skoda Octavia 1.6 Diesel (Car used for reference as my mother has one, and I know it's capable of the MPG quoted and much more).

VED - £0.00
Monthly miles again 2636, this time at 55mpg and fuel at £1.15 a litre = £250.56

So straight away that's a saving per month of £234.18.
Factor in the money I spend on repairs. Over the last year it's totaled £480, divided by 12, so £40 a month. Not to mention the PITA it is when your car does need to go in to a garage.

That'd be a monthly saving of £274.18.

Something like a new Skoda Fabia on PCP or an older one on HP could save me some time and money. And be generally hassle free.

PS £600 a year is a low estimate on the savings I'd make on fuel.
I haven't even started the longer commute and already I've managed to do 20,000 miles this year. God knows how! And if you add on the commute I could end up doing over 30,000 miles. That'd be a HUGE saving if I could double my MPG.

takman

Alan16ac wrote: »

Monthly car costs based on commute being 64 not 6 miles.

VED - £25.37
Commuting 1376 miles per month.
Commute to and from Christies twice a week 860 miles per month.
Days off visiting family, shopping etc 400 miles per month.
Total miles - 2636 miles
2636 at 30mpg and fuel at £1.15 a litre = £459.37

Monthly costs based on a Skoda Octavia 1.6 Diesel (Car used for reference as my mother has one, and I know it's capable of the MPG quoted and much more).

VED - £0.00
Monthly miles again 2636, this time at 55mpg and fuel at £1.15 a litre = £250.56

So straight away that's a saving per month of £234.18.
Factor in the money I spend on repairs. Over the last year it's totaled £480, divided by 12, so £40 a month. Not to mention the PITA it is when your car does need to go in to a garage.

That'd be a monthly saving of £274.18.

Something like a new Skoda Fabia on PCP or an older one on HP could save me some time and money. And be generally hassle free.

PS £600 a year is a low estimate on the savings I'd make on fuel.
I haven't even started the longer commute and already I've managed to do 20,000 miles this year. God knows how! And if you add on the commute I could end up doing over 30,000 miles. That'd be a HUGE saving if I could double my MPG.

In that comparison with such a high milage it does look like you will save money but you omitted to take into account of the monthly payment/depreciation so the savings won't be as high as you have calculated. Remember when leasing a car you will need to get one that allows 30,000 miles a year which will really push up the monthly payments!.

If your reason for changing is to save money then you can easily get a car that does 50 MPG from as little as £300, but you would want to spend slightly more to get a decent one. Plus you could save even more money by doing servicing and repairs yourself.

fwor

Alan16ac wrote: »

PS £600 a year is a low estimate on the savings I'd make on fuel.
I haven't even started the longer commute and already I've managed to do 20,000 miles this year. God knows how! And if you add on the commute I could end up doing over 30,000 miles. That'd be a HUGE saving if I could double my MPG.

This is a classic case of an analysis that adds up all the positives and ignores all the negatives.

In this example, if you add 50% to your mileage, things just keep getting better. But looked at another way, there will be a cost to pay. What the analysis misses (and takman already points out) is that at 30k miles a year you quickly trash the residual value of your car, and that will cost you money, one way or another. Rational or not, nobody wants to buy a 100,000+ mile car, and your "nearly new" one will be there in three years time - possibly while you are still paying for it.

The other factor convenient missed is the cost of using someone else's money instead of your own to buy the car. That's a big cost to ignore.

And then there is the issue of the DMP. As you probably know, a Debt Management Plan is an arrangement that gives you more favourable repayment terms on your existing debt, generally made on the condition that you don't add more debt until it's finished. Are you genuinely certain that the conditions of your plan allow you to take any form of credit to buy a shiny new or nearly new car?

Alan16ac wrote: »

To increase it would just make life miserable.

So - let's get this straight: you can't afford to increase payments on your DMP, as it will make life miserable. But paying a whole new set of repayments on a car loan won't make life miserable?

leespot

30,000 miles on a lease vehicle? Leasing is not what you need.

Mylo0811

fwor wrote: »

So - let's get this straight: you can't afford to increase payments on your DMP, as it will make life miserable. But paying a whole new set of repayments on a car loan won't make life miserable?

Thanks for your tone and lack of any form of help, but you've cleary not even bothered to read the thread.

Get down off your high horse.

Mylo0811

leespot wrote: »

30,000 miles on a lease vehicle? Leasing is not what you need.

Yeah, better off with a a used car it would seem. But again only if it's an option. If not I'll just have to deal with the fuel bills.

fwor

Alan16ac wrote: »

Thanks for your tone and lack of any form of help, but you've cleary not even bothered to read the thread.

Somehow I didn't expect you to like what I said, but I don't think you can disagree with the facts behind it. If you add in just the two factors that I mentioned, your new car will ~not~ save you money.

I've re-read the thread (again) and you still seem to be saying that you have outstanding debts from the past that you cannot increase repayments on (for whatever reason) yet you want to borrow more money, which will obviously mean more repayments than you currently make. There seems to be an inconsistency there.

Is borrowing more money allowed by your current unfinished DMP or not?

Mylo0811

fwor wrote: »

Somehow I didn't expect you to like what I said, but I don't think you can disagree with the facts behind it. If you add in just the two factors that I mentioned, your new car will ~not~ save you money.

I've re-read the thread (again) and you still seem to be saying that you have outstanding debts from the past that you cannot increase repayments on (for whatever reason) yet you want to borrow more money, which will obviously mean more repayments than you currently make.

Is borrowing more money allowed by your current unfinished DMP or not?

My intention is that my current budget for transport/car will not increase.
Overall I don't intend to spend more money.

This was posted further up...
"Yes, and no. I couldn't take out loans and credit cards. But I can have an allowance for my transport/car. And yes I know a lease is still credit.
I could increase it, but it is being paid off, and will be paid off within two years. I can live comfortable now. To increase it would just make life miserable.
I don't intend on spending more on the running costs of my car overall."