Wife made redundant - what should I do (car loan) ?

comete

Cross Post from another subforum, been advised it might fit better elsewhere and this seems appropriate...

Bit of insight into our situation:

We bought our house in zone 2 London last year, our mortgage is pretty low at £1200 a month. Low enough that i can cover the mortgage and bills (never more than £2500 a month) with my salary, with a bit left over.

My wifes industry is relatively niche, and this has given her the push she needs to set up her own online business (she trialled it in the past on a small scale and made reasonable profits, but now want to reinvest these rather than drawing a salary until its more stable). This is great as I am a remote worker so can be based anywhere, meaning we're no longer tied to London, or any city for that matter. We're having our house valued to sell, with a view to halving our living expenses.

Really the main thing I need advice on is in relation to a car. I have put down a 1k deposit on an 11k car, with the 10k balance to be paid on collection on 01 November. 8.5k of that 11k is from a bank loan, with monthly repayments of £200. Where we're planning to move we'll absolutely need a car. I'd appreciate your advice on how to proceed with this.

Option 1: continue with purchase and scrape by in the hope that wife can contribute before we eat through our savings
Option 2: cancel purchase, lose 1k deposit, buy cheaper car for 2k, and have no monthly repayments

[Deleted User]

What are your savings?

comete

In the region of 6k

djphig

I have done PCPs and loans in the past and have a current bank loan for my existing car. In my opinion, use your own money and buy a cheaper car.

I will never borrow money to buy a car again. It depreciates at a astonishing rate and by the time you have repaid the bank loan it will be worth next to nothing.

My 2.0 Seat Leon FR was bought for 20k 4 years ago. It is now worth around 8k max.

Buying cars on finance makes no sense to me anymore :-D

comete

I've been very lucky, we had a rs clio 220 for 3 years and sold it for pretty much exactly what was outstanding on the finance deal. Very lucky. The deposit i have put down is on a subaru forester sti, which appear to be stable at 8-11k. I don't think it's a bad purchase, I just worry that it might be a bit of a stretch in our current situation, even if it means losing the 1k deposit.

Terence_Burrows

Tricky thing with finance is that depreciation is affected by a lot of variables - new versions of your car being released included as well as changes in government legalisation. Given your position i wouldn't look to increase my monthly out goings where i don't need to.

All you need is a reliable car to get you to A-B , it doesn't have to be on finance. Though it will take longer you can easily source a decent car for cash.

Clive_Woody

Assuming this is from a dealer, you might want to consider buying a cheaper car given your current circumstances. Try giving them a call and see if the would let you "switch" your deposit onto a different car.