Car Finance Deals

eMundey

I am a young car buyer and I have little to none knowledge of cars (every dealerships dream, right) so I was wondering if anyone could inform me how I can save some money.

I am looking for a car that belongs to a low insurance group (3 or less), between £3,000 and £5,000 and 4 years old or younger (Like a Ford KA, Kia Picanto, Citroen C1 etc) and to pay for it via finance but I'm struggling to find deals that don't take advantage of my low credit score. I basically want to be charged as little as I can for credit.

Has anyone had the experience of and/or witnessed a friend/ family member experiencing in car financing with a low credit score (either due to credit troubles or because of a limited credit history such as myself)? Does anyone know dealers or websites (such as confused.com) that have reasonable APR? Do you know of perhaps any cars within my price range with cheap insurance?

Any help or anecdotes of your experiences would be fantastic

forgotmyname

Dont spend £5000 when you can spend £3000, there saved you £2000 already.

Dont buy it on finance there save you even more money.

How much do you have saved? Deduct the insurance from that and thats what you can afford to spend on your car of your dreams.

Saved you a load of money now, the bills in the post.

facade

Car finance is expensive on second hand cars.
You want a bank loan, or some way to get the purchase price onto a "zero interest" credit card, which you use only for the car, and pay off within the zero interest period.

These don't usually allow cash withdrawal, and most dealers won't allow you to buy a car on a credit card as it costs them a % and they are not permitted to pass it onto you (but you might be able to negotiate a "credit card price").

eMundey

forgotmyname wrote: »

Dont spend £5000 when you can spend £3000, there saved you £2000 already.

Okay so the lower end of my budget it is!

Dont buy it on finance there save you even more money.

I have to finance unfortunately, see below

How much do you have saved? Deduct the insurance from that and thats what you can afford to spend on your car of your dreams.

Unfortunately, I only have £550 saved which is enough for the deposit and about 40% of my insurance - In an ideal world, I'd wait until I had saved at least the asking price before even thinking about buying a car but I am being relocated in my job at the end of this month so I need a car very soon. It's not an ideal situation but you got to do what you got to do.

Thanks for your informative response

eMundey

facade wrote: »

Car finance is expensive on second hand cars.
You want a bank loan, or some way to get the purchase price onto a "zero interest" credit card, which you use only for the car, and pay off within the zero interest period.

Thanks for your advice, as previously mentioned, I have limited credit score (I'm 18), I have a credit card but it is something like 29% interest with a cap of £200 as it is the lowest I could get given my limited history - I only use it to build up my credit score. And I'm not too sure about a bank loan, I feel like the APR will be higher than the financing costs and that's considering I'll even get accepted! Would you accept an 18 year old for a £3,000 loan?

eMundey

I had a look at some loan deals.
The average loan that I have a fair chance of being accepted for (Doesn't specify that I need to be 21 or over or that I need have a good credit score - Via MoneySuperMarket compare loans) has an APR between 13.64% and 49.7% which, based on a loan of £4,500 equates so a total cost of credit of £944.33 to £3,391.73.
I have been looking at a couple of cars and the average cost of credit appears to be around £700 - £800 given my credit score and a asking price of £4,500. Which is actually less that what the best loan (that I would be accepted for) offers.

My credit score is around 310 for reference (on the 0 - 700 scale)

tonyh66

have you been to a car dealers like arnold clark they might be able to arrange a better finance deal, BUT do not take any of the extras like servicing,GAP insurance, paint protection etc etc, you do not have to commit to buying if you don't like the deal.

forgotmyname

If you have only saved £550 how will you pay the insurance and finance and actually run the car?

eMundey

forgotmyname wrote: »

If you have only saved £550 how will you pay the insurance and finance and actually run the car?

£100 for the deposit, leaving me with £450 for insurance. The average insurance is around £1,300, but I'm hoping to get a multicar deal with Admiral as my partner is with them, so lets say they take £200 off that (around £100 below the average saving they claim) that's £1,100 - £450 = £650, my mum said she would lend me the money if it was under £1,000 which £650 is, pay her back over, say 10 months which is £65 a month.

I work full time so my salary will cover road tax, the finance costs, petrol etc. I know how it sounds; but I've got to do what I've got to do for the work opportunity.

bobbiz22

eMundey wrote: »

I had a look at some loan deals.
The average loan that I have a fair chance of being accepted for (Doesn't specify that I need to be 21 or over or that I need have a good credit score - Via MoneySuperMarket compare loans) has an APR between 13.64% and 49.7% which, based on a loan of £4,500 equates so a total cost of credit of £944.33 to £3,391.73.
I have been looking at a couple of cars and the average cost of credit appears to be around £700 - £800 given my credit score and a asking price of £4,500. Which is actually less that what the best loan (that I would be accepted for) offers.

My credit score is around 310 for reference (on the 0 - 700 scale)

You said earlier you tried Confused.com, did you see that they show you your exact APR so you can see what you will definitely have/monthy payments will be exactly, along with a couple of representative ones? I think it's the only site that actually does that?? As a lot of them just give you representative ones, like what you've said on Moneysupermarket between two different APRs, and you have a "fair chance" of being accepted, I'd brace for the worst that if you do, you'll be offered a high rate.

I mistakenly took out a dealer loan and was the worst mistake I've ever made, as they just used BlackHorse and gave me a HUGE APR. Glad I'm rid of that car and loan now! 7k car, ended up paying 11.5k for it. Definitely worth scouting around and looking at different options.

I ended up taking out a Barclaycard for my next car (it was only £1000 car) but I had to draw cash out on it annoyingly as i bought privately, can't remember what my APR - I don't think it was that bad, maybe around 10%? But at least i owned the car outright and wasn't tied to a dealer or flogged all this gap insurance/paint protection garbage!

bobbiz22

Paid it off after 5 months anyway - you can't get a dealer that does such short finance haha!