Car finance (pcp)

Walkingdead91

Good afternoon, I’m just looking for some advice on weather I would be accepted for pcp finanace.

Little run down of my current situation

Earned 23500 last year
Private renting ( 5 years )
One default ending In 01/2020
2 credit cards one nearly maxed but keeping up payments + some and another maybe half used again keeping up payments and some
Got a personal loan 8k left to pay on that, used to buy my recent car. Loan was 12500 with Santander at 9.7%

I ideally need a bigger car and was looking at a car worth 19800, would be putting 2500 down hoping to secure it on pcp for 320 or less then use the money off my current car to clear mine and the other half’s cards

Do you think I’m living in dream world or do you think I should be all right. All my payments have been made ontime since the default. This includes a old car finance agreement that was settled a year early 2 years ago, cards, phone contract

Thanks

[Deleted User]

You've certainly not made it easy for yourself.

Asking for almost your annual income in car finance, on top of lots of other debt, maxed cards and a default means you'll need a lender who's comfortable with high risk customers.

DCFC79

Not entirely sure anyone can answer the question with any certainty.

Just apply, they will accept you or not.


If it were me Id go for something less than the £19800.

Walkingdead91

Deleted_User wrote: »

You've certainly not made it easy for yourself.

Asking for almost your annual income in car finance, on top of lots of other debt, maxed cards and a default means you'll need a lender who's comfortable with high risk customers.

I know. I wouldn’t call 5k worth of credit cards a masssssive amount of debt, and as you say nearly a full years wage on a car? I worked out it’s not even quater of my wage over the next 4 years as I know some people advice stopping below 25% etc but I don’t know exactly how the companies work things out and I know they won’t give a dam that I’ll be clearing credit card debt with the trade in from my current car valued around 10-11k

DCFC79 wrote: »

Not entirely sure anyone can answer the question with any certainty.

Just apply, they will accept you or not.


If it were me Id go for something less than the £19800.

Thanks again I know no one can really tell me if I will or will not be accepted. I was more hoping someone in a similar posistion would comment and tell me how they got on, I might just wait till feb 2020. That way the default should be gone and I’ll hace 4000 less on my cards as I’ve been over paying and plan on getting them down below 20% over all by end of the year.

[Deleted User]

Walkingdead91 wrote: »

I know. I wouldn’t call 5k worth of credit cards a masssssive amount of debt,

What happened to the 8k loan? Has that been paid off since your first post?

If that still exists, you're asking for a total of around 33k.

[Deleted User]

I’ll share my 2pence
Firstly £320 for a 19k car, on PCP minus the £2500, meaning £16500?
Seems steep to me..

I’ve been looking upwards of 28k for pcp and monthly figures are around the same as your 16500? Are you sure that’s correct?

Walkingdead91

Deleted_User wrote: »

What happened to the 8k loan? Has that been paid off since your first post?

If that still exists, you're asking for a total of around 33k.

No it’s still there

[Deleted User] wrote:

I’ll share my 2pence
Firstly £320 for a 19k car, on PCP minus the £2500, meaning £16500?
Seems steep to me..

I’ve been looking upwards of 28k for pcp and monthly figures are around the same as your 16500? Are you sure that’s correct?

Not 100% I was to referring to payments of under that amount. I think the one I seen online was 10% used car pcp and it worked out 291 or something like that.

System

Walkingdead91 wrote: »

I know. I wouldn’t call 5k worth of credit cards a masssssive amount of debt,

On its own in isolation it isn't but you have £8k of loan and you're wanting to take on an additional £20k so until you clear some of it off you'll have £33,000 of debt, almost 50% more than your annual income. I can't see any lender going for that to be honest.

Nasqueron

Walkingdead91 wrote: »

I know. I wouldn’t call 5k worth of credit cards a masssssive amount of debt, and as you say nearly a full years wage on a car? I worked out it’s not even quarter of my wage over the next 4 years as I know some people advice stopping below 25% etc but I don’t know exactly how the companies work things out and I know they won’t give a dam that I’ll be clearing credit card debt with the trade in from my current car valued around 10-11k

Point here is, what if you lost your job for example, you suddenly have that debt + your CCs + day to day expenditure. Do you have the £250-£300 a month going spare? If so, why have you not paid down the CC? If not, how can you afford this car?

Walkingdead91

Nasqueron wrote: »

Point here is, what if you lost your job for example, you suddenly have that debt + your CCs + day to day expenditure. Do you have the £250-£300 a month going spare? If so, why have you not paid down the CC? If not, how can you afford this car?

I have 600 spare a month from my wage to get through the month so yes I have the spare money. And I have paid them down. But my partner swapped jobs and didn’t get payed for 2 months so I helped her with everything she normally pays so that bumped them back up. I’m planning on having the lower one payed off with In 4 months then start paying the 0% one

I think from the advice on here I would be best waiting untill atleast my credit cards are at 0 and defaults cleared. Then I can use my current car as a deposit of 8k+ towards the 19k or keep to the 2500 deposits and clear the remaining loan amount.

DrEskimo

Walkingdead91 wrote: »

I think from the advice on here I would be best waiting untill atleast my credit cards are at 0 and defaults cleared. Then I can use my current car as a deposit of 8k+ towards the 19k or keep to the 2500 deposits and clear the remaining loan amount.

This is certainly the best way forward IMO too.

Get your debts cleared, start saving and then when you are able to, sell the car and use savings to get a used car of the size you need.

Don't start chasing artificially low monthly repayments on the false premise that you are getting cheaper motoring...new cars have the most expensive depreciation and PCP finance is nearly always (with the rare exception of 0%) most expensive way to borrow money for a car.

If you must borrow, do it on a low rate personal loan and look to clear it as fast as possible with the highest monthly amount.

Start thinking about how you can achieve your financial goals without the use of credit. You'll be in a much better position financially.