Car finance & Personal loan help

Grumpy_chap

Deleted_User said:

domevans8 said:

Thanks for the advice, however the first reply stated the lowest APR they offer for car purchase is 14%? 

No it didn't.  It stated that there was no way you'd get a consolidation loan for 3.8%, when the lowest you're being offered for a car loan is 14%, which is much lower risk.

The current higher rate is due to your high risk levels.  

You check your files via Clearscore, MSE Credit Club and Credit Karma.

A balance transfer is something offered by some credit cards, but not all.

This is confusing.  The OP said they have been offered 3.8% for car loan.

domevans8 said:

I am currently being offered a £7000 car finance loan at 3.8% APR and a personal loan at 14%, 

Also unclear whether the OP intends to buy a classic car to appreciate, or a newer car to use.

It will be a long time before the OP is offered the 14% loan at less than 3.8%.

Being MSE, the OP should just save for the house (unless car required for work) and forget about a car for a while.

domevans8

Not for at least 4 years, and I wouldn't do anything to jeopardise that. Myself and my partner have direct debits paying into a save to buy every payday, and I'm not going to take a loan at high interest.

domevans8

I'm trying to be financially sensible but also live my life before I'm tied down, it's a difficult balance!  

ace33

The choice is yours. I did the same at that age, as did my siblings. Ultimately a few years down the line we found that paying the PCP/car loan was a burden we wished we didn't have.

We have an older car here that we keep now for occasional use and a bit of fun. They need money spent to keep them on the road a lot of the time, nearly everything has been replaced over time.

domevans8

enthusiasticsaver said:

Any borrowing you take out will impact on the amount you can borrow for a house.  I would save up for a dream car or if you need one get a fairly cheap one to get you going until you have saved up enough or have your house. 

Any borrowing would be paid back by the time I am looking at getting a mortgage, I am still 4-5 years away. I could then consider selling the car if I needed - theyre appreciating, so the value would stay roughly the same despite me putting mileage on it

fwor

domevans8 said:

theyre appreciating, so the value would stay roughly the same despite me putting mileage on it

There are very very few "classic" cars that actually appreciate in value in real terms.

As Ace33 has already said, older cars will inevitable mean more maintenance, and the parts can be very expensive as they get harder to find. This is especially true of cars that aren't used much (the brakes in particular don't age well if they get little use), unless you have the luxury of a dry garage to put it in. I have two "classics" and have spent many thousands in the last few years, just on brake and suspension maintenance alone.

DrEskimo

The idea there is any certainty in getting your money back, or that it won't cost lots of money to maintain these cars is a misnomer.

I think the fundamental issue with your planning comes from this in your initial post:
'I feel that now might be the only time for me to realistically purchase it'.

This is simply not true. You have absolutely buckets of time.

Concentrate on the more pressing needs that will help set you up for a more financially secure future. Saving for a house, and not getting into debt over cars that cost thousands to maintain....

domevans8

I agree with both above, regarding the car being a 'classic'.. its a Honda S2000 (2003-2006) that I'm after, so are just beginning to appreciate after reaching their cheapest a few years ago. As far as maintenance is concerned, the general consensus from the owners club is positive, bulletproof engine and general wear and tear only slightly more expensive than that of a regular car, still modern enough for parts to be accessible.

As winter is approaching I plan on saving another few thousand until spring and seeing where I am then.. if I could increase my credit limit slightly upto £5000, I will then look into what some of the kind people above suggested regarding money transfers and do a few balance transfers. Would that be considered a lot to transfer and look bad on my credit file?