Very large deposit car finance, poor credit rating

Ahmed.ST

Hi guys,
Im looking to purchase a £45,000 car (HP). However, I have very poor credit rating (3 recent defaults). Long story short, ex girlfriend maxed out my credit credit (£1200) and also taken out a loan of £1600 in my name. Both I wasn’t aware of hence the break up. Long story which I’m not really wanting to get into.

2 month ago I applied for £15,000 finance on the basis of £30,000 deposit and was refused. I wasn’t registered on electoral roll at the time (I am now) and I also used an online broker (carfinance247) rather than a dealer.

I currently have finance on a vehicle (borrowed £15,000 at the time) which I will clear in full before buying new car so I’ll only have 1 finance account.

I can put down £30,000-£35,000 deposit. Would I have a better chance trying to get finance again with my current finance provider? Does having such a large deposit generally help obtaining finance? I’m ready to apply again as my electoral roll is on my credit file now but I don’t wanna dive in and get refused again  

my defaults on my file are total of £2800 which I can pay off myself but she’s promising to pay me that ASAP. So I’m holding off paying it off. 

What’s everyone’s opinion, any feedback is appreciated  

bradders1983

My opinion would be not to buy a £45k car and be more realistic if your credit file is shot to pieces and just buy a car for cash with the money you have, but you probably won't like that as an "opinion". 

Ahmed.ST

I appreciate every opinion. I totally understand your point and is very valid. Definitely something to consider. Ofc I would like if I was to get the car I want as I can comfortably afford repayments. 

If all fails, that would be the route I’ll take

fwor

I'd agree with what Bradders says - with £2.8k of unsettled defaults to your name, things won't look good to lenders.

It would make sense either to buy a cheap car for cash while you sort out the defaults and they drop into the distant past in your credit history, or to slum it in a £30-35k car if that's what you have free right now.

jonesMUFCforever

With 3 recent defaults I  doubt you will get any large loan even if secured on the car.

Ahmed.ST

What if I clear the defaults in full and leave it few months and try again? Will that help? 

DrEskimo

Why do you have £15k debt if you are sitting on £35k cash....or is it £50k cash as you indicate you will clear this in full, then use £35k towards the new car purchase?

Is the £15k finance on your current car secured against the car? If it's just a personal loan, then leave it running.

How long will it take you to save another £15k? What's the rush to buy the car so soon? Why not wait until you have the money saved then buy it, and then you don't have to worry about monthly payments or lenders perceptions of your apparent credit worthiness....

Ahmed.ST

DrEskimo said:

Why do you have £15k debt if you are sitting on £35k cash....or is it £50k cash as you indicate you will clear this in full, then use £35k towards the new car purchase?

Is the £15k finance on your current car secured against the car? If it's just a personal loan, then leave it running.

How long will it take you to save another £15k? What's the rush to buy the car so soon? Why not wait until you have the money saved then buy it, and then you don't have to worry about monthly payments or lenders perceptions of your apparent credit worthiness....

I have £25,000 cash. The car I have at the moment is worth £20,000-£22,000 and has roughly £10,000 outstanding. My plan is pay the balance, use the car as a deposit and add cash on top to make the £30-35K deposit. It’s finance secured against the car with Motonovo. There isn’t really a major rush. Just saw a car I really like and wanted to treat myself

DrEskimo

Ahmed.ST said:

DrEskimo said:

Why do you have £15k debt if you are sitting on £35k cash....or is it £50k cash as you indicate you will clear this in full, then use £35k towards the new car purchase?

Is the £15k finance on your current car secured against the car? If it's just a personal loan, then leave it running.

How long will it take you to save another £15k? What's the rush to buy the car so soon? Why not wait until you have the money saved then buy it, and then you don't have to worry about monthly payments or lenders perceptions of your apparent credit worthiness....

I have £25,000 cash. The car I have at the moment is worth £20,000-£22,000 and has roughly £10,000 outstanding. My plan is pay the balance, use the car as a deposit and add cash on top to make the £30-35K deposit. It’s finance secured against the car with Motonovo. There isn’t really a major rush. Just saw a car I really like and wanted to treat myself

Well it makes little sense to have £10k debt when you're sitting on £25k cash. What's the APR of your Motonovo finance?

I would then just give it about a year, keep saving (+ add the monthly cost you are no longer paying towards the car finance) and sell and buy the new car with cash. The £45k car you want today will be dropping in value too, so depending on how much you can save, probably won't take too long.

Ahmed.ST

Yeah I was thinking that. I’ll likely pay it off this week regardless. I asked for a settlement quote which was £10150 against £1100ish that’s outstanding so saves me a grand of interest. 

The real question I really wanted to know was, how much impact having such large deposit have on application for finance. thanks for all the feedback. I’ll start making moves Monday 

DrEskimo

Ahmed.ST said:

Yeah I was thinking that. I’ll likely pay it off this week regardless. I asked for a settlement quote which was £10150 against £1100ish that’s outstanding so saves me a grand of interest. 

The real question I really wanted to know was, how much impact having such large deposit have on application for finance. thanks for all the feedback. I’ll start making moves Monday 

Good plan!

Oh yes, it will undoubtedly factor into their risk assessment. Whether that factor alone will be the difference between you getting accepted or not given your other circumstances would be hard to predict..  

Hence why my advice is don't rely on them! No second guessing and saves you money by not paying interest charges.