C/C Money transfer for car finance

I will start with my question: What is best to do with £225.54/month?

I have a car on finance bought on a 5 year HP finance option at 10.6%APR. I have 41 months left to pay and my balance is £8494.18. I pay £225.54/month (there is £902.96 worth of overpayments).

I have always been prepared to pay for a car on finance but after reading the stoozing board I thought there maybe a better way to pay off the car.

I have never had a credit card (although my OH half has a few with £0-£100 balances). I used the MSE credit club to see my credit file with Experian and my credit rating was fair. Eligibility for good rate cards was 95%.

So I thought lets see if I can get a money transfer card(s) to pay off the finance. Virgin offered 36months @ 0%, 2.9% fee. I speculatively input that I would want £7000 money transfer at application and I was approved with £8300 credit limit. I was shocked that I could get this in one hit :cool:.

I obtained my car finance settlement figure which is at £7154. I will use the money transfer (+£154 of my own money) to pay off the finance leaving me with a credit card debt of £7203 @ 0% for 36months. A saving of £1136.58 in interest over the remainder of the finance term:j.

I can afford £225.54/month and was wondering how best to use this money?

P.S MBNA approved me for their all-rounder card on the same day with credit limit of £7200 which I am also looking to start stoozing but that's for another day.
You should pay attention to the needs of the moment - otherwise there is no future. But to ignore the future is foolish - living solely for the moment leaves nothing for when the next moment arrives.

Replies

  • MallyGirlMallyGirl Forumite, Senior Ambassador
    5.9K Posts
    Ninth Anniversary 1,000 Posts Name Dropper Intrepid Forum Explorer
    Senior Ambassador
    put it into a regular saver at 5% and then use at the end to pay off before the 0% runs out
    I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
    & Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected].
    All views are my own and not the official line of MoneySavingExpert.
  • MogleyMogley Forumite
    250 Posts
    I'm assuming that also means that if 0% balance transfers are still available in 3 years I could choose to transfer the balance and continue to generate more interest from savings knowing I have the cash there to pay it off if there are no good credit deals? I'm new to the stoozing concept so it's taking a little time to get my head around. I'm quickly realising that discipline is key!!
    You should pay attention to the needs of the moment - otherwise there is no future. But to ignore the future is foolish - living solely for the moment leaves nothing for when the next moment arrives.
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