What is the best way to finance a car/van when I am not working?

local_yokel

Dear MSE,

I need a car or van to start up my own business (very early days yet). I am mortgage free and jointly own my house with my partner. My partner works part time and I left my last job at the end of February but this was voluntary, as I was completely stressed with the role in distribution sales. So wanted to step away and set up on my own. Unfiortunetly with hindsight, it would have been better had I stayed their as at least I would have been furloughed, as have many of my former colleagues. I did speak to my former employer, but when asked if they would re-employ me so that I could get a furlough payment, they outright refused.

So I need to purchase a vehicle (as my company car went back). I have little capital savings as we have paid the mortgage off earlier in the year. As I am not working, and have two smallish loans against my name, (wifes car loan £6K balance and furniture £4K balance) I dont want to apply for another loan.

I have looked at equity release, but is there another way I could potentail copnsider as I have the house as security or should I utilise the equity in the house???

I have a good credit rating but very cautious about taking on expensive debt at this time.

Please could you suggest my options?

Many thanks.

m-holland

local_yokel said:

I did speak to my former employer, but when asked if they would re-employ me so that I could get a furlough payment, they outright refused.

wow

jonesMUFCforever

How old are you?
£10k worth of debt with no job may become a big problem going forward and that's before any payments towards a vehicle?

Grumpy_chap

The OP is mortgage free so in a good position and I doubt that young that they won't be able to manage a strategy to deal with current debt liabilities.

Regarding the car, can the OP share his wife's car in the short term while setting up the business?

Or, an older car to start with.

Alternatively, a business plan and business start up loan might be an option to consider.

jonesMUFCforever

Grumpy_chap said:

The OP is mortgage free so in a good position and I doubt that young that they won't be able to manage a strategy to deal with current debt liabilities.

Regarding the car, can the OP share his wife's car in the short term while setting up the business?

Or, an older car to start with.

Alternatively, a business plan and business start up loan might be an option to consider.

Did you read the OP's first paragraph?

Grumpy_chap

jonesMUFCforever said:

Did you read the OP's first paragraph?

Er, yes.  Did you?
I am not in the habit of just making random comments on a public forum.
I also read your post with the query about the OP's age.  I did not see the immediate relevance of that to the situation, but clearly you have a chain of thought, so did not diss you.
Are you going to share what your problem is with my post, or keeping that to yourself?

enthusiasticsaver

With no regular income (beyond your wifes part time job) I would not advise further borrowing and definitely do not remortgage the house.  I doubt you will get any borrowing approved anyway.  

Have you done a business plan?  Starting a business is not easy especially with no capital behind you so in hindsight again it might have been better to keep the money back earlier on in the year rather than pay it off the mortgage. You can investigate business start up loans but I would recommend you think long and hard about this and do some research before going any further as many as 50% businesses fail in the first five years and in the current climate that statistic is probably not going to improve.  I am not saying this will apply to you but taking some time to think and do some research before jeopardising your home and taking on a debt for a car or van would be sensible.  Starting a business with no cash, unless you have a partner who can come in with you will probably involve you not forking out for things like vans or cars immediately.  Will you need tools?  Can you use your wife's car when she is not using it? Is it possible to just work from home without a car until you get some money behind you? Do you have any connections which makes you think you can make a success  of the business? These are all things you need to think about before deciding to fork out several thousand pounds on a vehicle. 

MEM62

Car sharing with your wife or buying whatever you can afford to pay for outright are your only real options here.  in any case, risking your house as security for a car purchase would be madness.      

jonesMUFCforever

Grumpy_chap said:

jonesMUFCforever said:

Did you read the OP's first paragraph?

Er, yes.  Did you?
I am not in the habit of just making random comments on a public forum.
I also read your post with the query about the OP's age.  I did not see the immediate relevance of that to the situation, but clearly you have a chain of thought, so did not diss you.
Are you going to share what your problem is with my post, or keeping that to yourself?

Problem? He left his employment then wanted to go back to be furloughed?
With no income he aint going to diss gettin a loan for a van.
The business plan I agree with - but no bank is dissing him with 100% loan for a vehicle - he will have to provide up to 50%.

MinuteNoodles

You won't get any finance with no income and existing debt. You're very unlikely to be able to remortgage because you have no income to pay for the finance.

I would sign up to some agencies, get some work and save that money. £1000 will get you something that'd get you started. But as has been mentioned have you actually done a business plan and done your research to see if what you're doing is viable? If you were planning on getting a van and doing man with van type business world and dog seems to think that's a good idea so competition is fierce.

macman

Small van or car? Buy a banger for 1£K cash to get you started.
As above, using the roof over your head as security for a car loan is insane.