Help buying a car

Jcrowley123

Dear MSE community

I want to buy a car and am looking for the cheapest and best way to do so.

I was reading the website and came across a link for a guide about cheap personal loans.

However I am not sure if this applies to me.

According to clear score my credit rating is 501 out of 700 and is considered good on their website. And on experian my credit rating is 987 out of 999 so excellent by their terms.

With this and the fact I make £19,000 Before tax a year and have the outgoings of about £500 a month can people please suggest some tips.

I already have one credit card but it has a limit of £1500, but when looking to open another, no one advertises the limit I could have on it.

So does anyone have any advice for that part?

I then started looking at a loan and was wondering if I did take a loan out for say £8000 for 4yrs but repayed it in say 1yr or less would that be, not detrimental, but have less of a good of an impact on my credit score/history?

If you follow. What I mean by that is; yes I borrowed a lot and repayed it quickly which is good. But I payed it back too quickly and as such the bank doesn't have a record of me making consistent payments over a long time.

Does that make sense, and can someone please advise me about loans and credit scores in that regard?

I do know that there is a penalty for overpayments totalling more than £8000 a year, as stated in that MSE article. So I keep under that limit but pay off the loan quickly is that a bad thing credit score wise?

I was also on both clear score and experian and both had sections for a loan and car finance. If I get a loan for a car can anyone please explain how these are different or what effects these might have?

I appreciate that this may be a lot of information and a complex subject. But any advice the community can give me on how to purchase a car as cheaply and most benifical to my credit score would be most welcome.

Kind regards

James Crowley

foxy-stoat

So just apply for 1 or 2 loans at the level you want to borrow and see what rate you get offered.

Your credit score is only seen by you so dont get hung up on the numbers.

Your credit history will be positive when you repay debt, doesn't matter if you make all the contractual payment or 1 or 2 over payments, miss a payment and your in trouble for a few years.

If you can afford to repay an £8000 loan in less than 12 months then save for a few months and take out a cheaper loan.

Borrowing half of your nett annual income for a car seems a little steep, I would buy a cheaper car until your salary increases, is what I would do, but up to you.

dresdendave

Have you not got any savings to put towards the car? 19k salary gross should mean a take home of at least £1300 per month. If your outgoings are £500 per month you should have built up a decent savings pot. Use that instead of borrowing.

robber2

If you make £19k a year and have outgoings of only £500 per month then why not wait for 12 months and then pay cash for a car with the £13k you will have saved up ?


Rob

[Deleted User]

Experian have given you a high score because you seem to have little credit history and just a low limit card, and are therefore a high risk or at least an unknown quantity for lenders, who won't care about the scores you've been given.

I think you will struggle to get a mainstream Lian for such a large proportion of your income. I would second using the savings you must have built up with such low outgoings. A few more months saving will mean you don't need a loan at all.

parking_question_chap

I know this might sound a old fashioned but why not just save up? You have said you want a car rather than need a car, and you will be saving enough money each month.

username901

Cheapest way is to save up. £8k over 3 years with interest is just under £250. Save this for amount for 3 months, and voila, you have enough for a cheap run about, and then £250 a month to save up for any repairs or get it through its next MOT.

EssexHebridean

I'm going to add another vote to the "save up" tally here too I'm afraid. Also deliberate carefully around what you need from a car - if it is a want rather than a need that suggests it will be used mainly for running around and weekend jaunts - so probably not massively high mileage, take that into account when buying, there is little point in spending more than you need on something which will spend more time sitting at the kerb looking pretty than actually doing its job of ferrying you from A > B.