Car loan several years after bankruptcy

Legacy_user

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foxy-stoat

How much do you manage save each month?

I would try the loan eligibility checker on here and try 1 or 2 applications, one with your current bank and 1 with say Clydesdale and see what interest rates you get offered.

System

We save a bit between us to cover annual bills and have a few £K in premium bonds but other than that we're not really in the league of savers.

foxy-stoat

If you manage to save £250 a month then try for a loan - if your not managing to save that much then you wouldnt be able to afford the loan - is what I was getting at.

Sounds like you save a little each month away so you should be ok. I would get a loan over 2 years though, just incase the car only lasts that long and you have to buy another one with another loan.

Good lucks

System

Thanks. Two years would increase the payments a bit too much though. I was thinking 4 with a no-penalty option of an occasional lump sum to bring it down, if that's possible. My work is such that we can suddenly find ourselves with two or three grand coming in that we weren't expecting and I'd like to be able to pay a chunk off the car to bring down the term or the amount.

Gaz83

messedupmoney wrote: »

We save a bit between us to cover annual bills and have a few £K in premium bonds but other than that we're not really in the league of savers.

If you're not really in the league of savers, how do you propose you'd pay for a car loan?

System

The money's there, we'd just adjust our spending.

System

messedupmoney wrote: »

The money's there, we'd just adjust our spending.

If you've not been saving £100+ a month it most likely isn't, especially when you have a £38k-£45k income and carry a credit card balance. For most people cutting outgoings by £250 a month requires major changes, ones that even if they do do it they tend not to keep up to for very long and then they're in here, the motoring or the DFW board asking for help with a debt they can't afford.

we're not really in the league of savers.

Shame really because had you been once you'd got the get out of jail free card of bankruptcy and put away £250 a month you say you are to be able to afford over 7 years you'd now have over £21,000 in the bank so could have gone to a Ford or Hyundai dealership and bought an almost new one in cash.

My work is such that we can suddenly find ourselves with two or three grand coming in that we weren't expecting and I'd like to be able to pay a chunk off the car to bring down the term or the amount.

When I was self employed and that happened I put it away and kept it so that when I had periods of no work then I could still afford to pay myself a wage.

I fear the lessons from bankruptcy weren't learned.

Anyway back on topic, AS LONG AS YOU PASS AFFORDABILITY TESTS your previous bankruptcy will have no effect and you should be OK.

Cheapest options in order are:

0% on new spending credit card on the longest term you can get.
Card with money transfer offer, typically there'll be a one off charge of 1.9%-3.5%.
Personal loan over £7500 even if your car is below that (repay whats left over) as rates drop notably above £7500.

Don't get a used car on PCP.

Brock_and_Roll

I need to finance a new (used) car. Looking at a Focus or i30 maybe, probably up to £7-8k.

No you don't. Alas it seems that hard lessons from bankruptcy, and repossession have not really been learned.

Firstly, with your income level, you should have had no difficulty in sticking a few hundred away every month over the last few years in anticipation of the old car dying.

Secondly, why on earth do you need to spend £8k to get a reliable used car? I appreciate it sounds smug, but regardless of my income level, i have not spent more than £2.5k on a car over the last 15 years and never suffered a breakdown.

Thirdly, you state that you have Premium Bonds - nothing wrong with that. However, it is crazy to have Premium Bonds paying 1.5% or whatever when you are about to take finance at 5% or so. That is literally chucking money down the toilet!

Sorry sounds harsh, but cars are one of the worst "value traps", made worse if on finance especially PCP.

sourcrates

Brock_and_Roll wrote: »

why on earth do you need to spend £8k to get a reliable used car?

I appreciate it sounds smug, but regardless of my income level, i have not spent more than £2.5k on a car over the last 15 years and never suffered a breakdown.

I have to agree with this, cars are built to such high standards these days, older models last forever, as long as they are looked after.


The depreciation on these tin boxes is ridiculas, motoring is money down the drain anyway, so the less you spend on them the better in my book.

System

Well, thanks for the advice. The finger-wagging and coulda/shoulda/woulda smugness from some corners is completely unnecessary though.