Eternally in the red.

smokingsxr1000

My self-employed income has been erratic for many, many years. I have relied on the peaks to clear what I now consider massive unsecured borrowings, mostly on credit cards. I'm forty this year and want to stop work eventually and have decided to tackle this head-on and hopefully be debt free within 5 years.

I've bought myself a cheap car (£118/month) that I'm running alongside my lease car that finishes it's term in November (£385/month) which I'll not be replacing.

Credit Card Outstanding £15,000. Minimum payment £215 of which ~£65 is interest on a life time balance.

Bank Loan £11,000 @ 7.1% APR £165

Car PCP £8,750 @ 0% £118 x 42 plus balloon <£4k

My credit rating is fair and I've never missed a payment on anything and don't intend to. No longer ignoring the problem.

So my journey starts at £35,000 :eek:

FinallyDebtfree2017

You have taken the first step towards debt free living:T

dieselv2

Hi.
So from your post you have 2 cars your paying for but only driving one. Bit too early if lease doesn't run out until November.

If you have a fair rating can you move your credit card or most of that amount to a 0% card? Get debt down quicker.

smokingsxr1000

I've pretty much reached the mileage allowance on the lease car and this nets off against the £118. I'll be running the PCP into the ground over 7-10 years and 150,000 miles. Thereafter my costs fall from 70p to 30p per mile.

The credit card balances have all been 0% as I've moved them around on 30+ month initial rates over the years. More recently they've been 1 year 0% with a 2.5%-3% fees with the same providers. I'm reluctant to take out more credit cards (already have £40k available to me) and happy with the 4.9% APR lifetime rate given to me.

When the lease car goes back I'll be overpaying my debts by £250 a month prioritising most expensive first.

zippygeorgeandben

You're journey starts here! Don't be a small time poster. Keep us updated!

enthusiasticsaver

I am sorry but I don't understand the car situation. Do you mean you are paying £385 per month until November for a car you cannot drive? £3850 for 10 months payments?

Also £65 per month interest on a credit card is a further £780 over the year which could be reduced if you can get it or most of it on 0%. Is your income less erratic now?

Kitten868

Seriously think you need to enquire about giving the car back now. Not after you've paid another £4k for it.

dieselv2

I think OP is saying that the £118 a month for a car he can have unlimited mileage on is cheaper than the cost to add more miles onto the lease car.

enthusiasticsaver

dieselv2 wrote: »

I think OP is saying that the £118 a month for a car he can have unlimited mileage on is cheaper than the cost to add more miles onto the lease car.

Even when you take into account he is paying almost £4K for it to be sat doing nothing for almost a year? He is paying more than £500 per month to lease cars plus presumably the cost of fuel and maintenance. That is a serious waste of money. Can he not give the car back early?

smokingsxr1000

Kitten868

I have already enquired with regards to an early settlement of the lease and to do that they'd requirement payment in full for the remaining payments upfront and the mileage allowance would be prorata'd to the date the car gets handed back which would raise an 8,000 mile excess charge of £1,000 plus their unspecified administration costs to return the vehicle back to themselves early. I'm very happy to hold onto the car under these circumstances.

Ilona

I don't understand the car thing either. OP decides he is going to do something about his debts and the first thing he does is go out and buy a car. So for almost a year one car will be sitting doing nothing while he is paying for it.

I see this sort of thing happening over and over again. Example, someone wants to keep track of their spending because they want to cut down. The first thing they do is buy a shiny new notebook. Plenty of free paper lying around, envelopes through the post.

I never cease to be amazed at some people's logic. My logic is simple. Stop spending money you haven't got.

Ilona