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Some Advice Needed Please

First time poster long time reader... 
I could do with some advice. I have recently got a new job that pays well and comes with a car allowance. There are some stipulations on the car allowance that require me to have a car of a certain age/type etc so im pretty clear on the car i want. And i realise they are a depreciating asset etc etc but im a petrol head and the company will be effectively paying for it. Im looking to spend around £17k over 5 years that keeps the repayment well within my allowance leaving spare for insurance and maintainence etc. 
I currently dont have a car as i settled a PCP last year and have not needed one since given i have been working from home. 
My question is...
I got a new morgage last August and my credit file seems to of calmed back down now and my score is excellent. I have £4k on CC which im paying down as quickly as i can but as i say the allowance will cover the car. 
PCP isnt really an option as i have no idea what my milage will be, its a new role but could well be over 20k miles a year. 
So im looking at a used car.
Looking at loans it seems lenders are playing things quite close to thier chest at the moment. Ratesetter have approved me for 4.9% which is higher than i would like. 
There are a few companues where i am 95% eligable. I have done a quote with AA and they said i had a 9.9/10 chance of being accepted and thuer representative rate was 3%. 
Im nervous about blindly applying to see what rate i can get as i need the car in place by the end of the month ideally for my start date and dont want to wreck my credit file in the short term. 
Should i have a go with the companies that are saying 95% or 9.9/10 and risk the rate coming back higher or should i go safe with the 4.9% i know i can get? 
Thanks for any help.
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Comments

  • zzyzx1221
    zzyzx1221 Posts: 188 Forumite
    100 Posts Name Dropper
    4.9% really isn't that high.

    Bear in mind that the approval chance is exactly what it says and nothing more, merely the number of people who are approved for the loan.  It doesn't mean people are approved for the loan at the headline rate (and many will not be.)

    One application probably won't hurt but if you get knocked back or offered a high (at least in your eyes) rate I'd probably just go with Ratesetter.
  • An offered APR must be given to 51% of successful applicants, but that said 4.9% isn't bad for a second hand car and lower than some new PCP deals. You might get 6% with AA for all you know
  • DCFC79
    DCFC79 Posts: 40,614 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Nothing wrong with 4.9%, yes it might be more than what you would like but if its the best you can get then so be it.
    Your score is only seen by you, lenders see your history and they will decide what rate your offered.



  • Splash21
    Splash21 Posts: 24 Forumite
    Second Anniversary 10 Posts Name Dropper
    I have a loan with Hitachi Capital, recommend them and I think I'm on 3% APR taken out July last year (£7k). 
    Give them a try. 
  • Nebulous2
    Nebulous2 Posts: 5,507 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    That isn’t a bad rate. The sweet spot for loans tends to be £7.5- 15k over 3 years. Pushing the amount higher and the timescale longer will often increase the apr. You’re looking at £2152 in interest borrowing £17k over 5 years. 

    I’d be more concerned at the timescale. Buying a secondhand car to potentially do 20k a year over 5 years seems risky to me. 
  • macman
    macman Posts: 53,128 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    If you cover £20K a year, then it's unlikely that you'll still be running the same used car in five years. By then it
    will be maybe 8 years old and have done 130k or more?
    So you'll possibly be still paying off the 5 year finance on a car you no longer own.
    No free lunch, and no free laptop ;)
  • DrEskimo
    DrEskimo Posts: 2,384 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    macman said:
    If you cover £20K a year, then it's unlikely that you'll still be running the same used car in five years. By then it
    will be maybe 8 years old and have done 130k or more?
    So you'll possibly be still paying off the 5 year finance on a car you no longer own.
    Agreed.

    If thinking of changing at 3yrs (for example), the settlement would be ~£7,500, so essentially hoping that the value of the car after an additional 3yrs/60k miles will be worth north of £7,500.

    Extending the loan term and then changing mid way through is synonymous with just getting a PCP loan on the car where the term is just 36months and the GFV is set at £7,500. Except at least that final value is underwritten (assuming of course you can get a PCP loan at 4.9% APR and with a GFV of £7,500 after 3yrs/60k miles).

    My advice is look at reducing the term to reduce the interest and a more feasible ownership timeframe, or get a cheaper car. General rule of thumb is not to use finance at all for cars, but if you want to then don't finance more than 50% of the cars purchase price over longer than 3-yrs (and of course at a 'sensible' APR).
  • macman said:
    If you cover £20K a year, then it's unlikely that you'll still be running the same used car in five years. By then it
    will be maybe 8 years old and have done 130k or more?
    So you'll possibly be still paying off the 5 year finance on a car you no longer own.

    Plenty of people run cars a lot longer than 8 years (in the UK the average age of scrapping is about 14) and a well maintained decent car should do 130k (UK average at scrapping is 106k according to a Sunday Times article), it depends on the OP, if he's doing sales and wants a flashy car then yes your advice is very good. If they're not about keeping up appearances and are prepared to look after the car, a pre-reg or low mileage car could well be paid off and still running after 10 years
  • macman
    macman Posts: 53,128 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I wasn't querying running a car beyond 8 years or 130K: I was querying the wisdom of getting to the point where replacement may be required and still owing two years finance on it.
    No free lunch, and no free laptop ;)
  • macman said:
    I wasn't querying running a car beyond 8 years or 130K: I was querying the wisdom of getting to the point where replacement may be required and still owing two years finance on it.
    Your post clearly states that doing 20k a year would mean him being "unlikely" to still be using the car in 5 years (i.e. him having an 8 year old car with say 130k miles on it). If he had 2 years finance left per your example, that would mean him having scrapped the car at 6 years old with, (based on your assumed 30k starting miles), 90k miles on it. How can it be read any other way?

    If OP buys a 3 year old car with 30k miles on it, with 5 year finance, how is it "unlikely" that he will still have the car in 5 years, i.e. when the car is 8 years old and around 100k miles added taking it to 130k miles?

    If OP is sensible and maintains the car, it could be still running in 7 years time, even 11 years time, with 200k+ miles on it
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