Loan to pay off PCP then Pay off loan

humey86

WE are looking at changing our car and have received a settlement figure. I have checked the market value and received quotes from Webuyanycar and they are near enough the same. 13k Settlement and £11k valuation. As we will be getting a HP or bank loan to purchase the next vehicle (around £24k) I was wondering it there are any loans that provide the ability to take out enough to settle the PCP and then payback the loan early with money received from the sale (plus savings) with little or no repayment charges?

[Deleted User]

You'll pay early settlement charges on both.  Pretty much all loans work the same.

DrEskimo

How much have you got in savings?

Why would you get a loan, settle it, and then get another loan? Why are you looking to get a loan to settle the PCP if you are going to sell it to somewhere like WBAC? They will pay £11k towards the £13k settlement so you only need to give the £2k shortfall. Do you have that?

Finally, why are you looking at buying a £24k car? I would advise you to avoid borrowing for a car at all, but at minimum you should be looking at financing no more than 50% of its value over 3yrs.

humey86

Ok I didn't realised WBAC would setting the financing, that's good to know.

We are looking at a VW transporter conversion as we have wanted one for a while. £24k for one of these is low, We are unable to get a loan for that amount despite a good household income so the next option would be a HP.

DrEskimo

humey86 said:

Ok I didn't realised WBAC would setting the financing, that's good to know.

We are looking at a VW transporter conversion as we have wanted one for a while. £24k for one of these is low, We are unable to get a loan for that amount despite a good household income so the next option would be a HP.

With greatest respect, £24k might be a low for it, but the question is whether it's worth getting that much into debt over a heavily depreciating item?

There is likely to be a reason for not being able to get an unsecured loan, so that raises even more doubt about whether this is a financially sensible decision.

humey86

With the greatest respect these vehicles are probably the best for holding their value. I agree, cars are high depreciation items.
With quotes we have had for finance we will be paying back the same amount as we were on our current car, around 8% of our monthly net income.

foxy-stoat

Best just to VT your current car and pay any shortfall.

Try HP for the VW if you really want one, but I wouldnt use it as a daily driver.

humey86

To get the car up to 50% for VT would cost £6k
Why not use for a daily driver?

MallyGirl

I love my T5 camper but I wouldn't want to use it as my only vehicle. Campers are heavy to drive and even the SWB needs a decent sized parking space (I have been known to get out of the sliding side door as I couldn't open the drivers one).
Taking 2 loans in quick succession is risky - even if you pay off the first it will still linger on your credit history as open for a while as these things are updated monthly. That might prevent you getting the second loan for a while.

MinuteNoodles

humey86 said:

With the greatest respect these vehicles are probably the best for holding their value. I agree, cars are high depreciation items.

Have to agree in this case. The money that even 10 and 15 year old ones are fetching is truly mindboggling. There was a 1995 T4 campervan conversion advertised locally last week for £9500 and it went within a few days. A few years ago someone I knew bought a 2008 T5 ex-builders with over 120,000 miles on the clock for £8k and spent another £8k on it and that apparently was still cheaper than going and buying a decent 9 year old 120k T5 that was already done.

Van prices seem to be mental at the moment. My wife has an 08 plate Renault Traffic and has owned it for 4 years and they're now selling for what she paid for it back then. It would ultimately be a free van less the repairs should she sell now.

Very occassionally there's cars which have very slow depreciation or actually increase in value (2015 Ford Mustang 5.0 V8 RHD when it was released in the UK) and this happens to be one of them.

Nebulous2

MinuteNoodles said:

humey86 said:

With the greatest respect these vehicles are probably the best for holding their value. I agree, cars are high depreciation items.

Van prices seem to be mental at the moment. My wife has an 08 plate Renault Traffic and has owned it for 4 years and they're now selling for what she paid for it back then. It would ultimately be a free van less the repairs should she sell now.

I bought a van last year to carry bikes and tow a caravan. Since buying one I’ve been astonished how many other people you see using them as everyday transport.

At one time vans weren’t allowed on a lot of campsites. Being away recently, about a third of the caravans were being towed by vans. These weren’t multi-purpose works vans being used to tow either, they were solely domestic vehicles. As caravans have got bigger, and a lot of cars smaller, you either need a 4 x 4 or a van to tow one.