Car Purchase

I’m looking at purchasing my first car but really don’t know what kind of finance to opt for whether PCP or HP is best and if HP what interest rates are considered a good deal.

I am only after a small car VW Polo, Golf or something of that size and am in a position to perhaps put a £3000 deposit down. Again now sure whether to buy new or second hand.

I have a excellent credit rating and pay off CC in full each month, so I’m hoping this will secure some reasonable finance.

Downside I’m not working but can afford the payments myself also with the help of a family member who will benefit from the use of the car - they are giving up their Motability car as they can no longer drive and it’s not viable to keep hold of it. I’m a named driver on it but would rather it went back and I buy my own car.

Any help gratefully accepted.


  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    edited 26 October 2021 at 6:07PM
    You're not assessed on your credit rating but on your credit history and current circumstances. Without a formal income, you won't be able to get finance. 

    Buy something cheap from your savings to tide you over for a couple of years until you're more stable. 
  • macman
    macman Posts: 53,082 Forumite
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    The cheapest new Golf is about £23k. You have no income,  but say you can finance the repayments on a loan of £20k (£3K deposit)?
    Seriously, who do you think is going to lend you £20K on that basis?
    You can buy a perfectly good used car with your £3k savings, assuming that you can then afford to run it (fuel, insurance, VED, servicing and repairs) on zero income.
    No free lunch, and no free laptop ;)
  • bazzyb
    bazzyb Posts: 1,584 Forumite
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    edited 26 October 2021 at 9:39PM

    Downside I’m not working but can afford the payments myself
    Where is your income coming from if not employed? There will potentially be only a few lenders who will consider you - your exact circumstances will dictate if you will be able to try with the limited option of prime lenders with relatively competitive rates or if you need to look at more specialist lenders with higher rates. 
  • MalMonroe
    MalMonroe Posts: 5,783 Forumite
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    I agree with macman and zx81 - there are some really good used cars out there for three grand to last you in the short term. And if your relative is going to help you with costs anyway there shouldn't be a problem. I'd never recommend stretching yourself to the absolute limit of your finances either because I've been there, done that and ended up with a DRO to prove it. Now I always ensure that I have money before an event, rather than after. And when I use my credit card I pay it off in full every month, as Martin has taught me. 

    You won't be able to get a loan with no guaranteed fixed income sadly, so there's no point attempting to discuss which is better. 
    Please note - taken from the Forum Rules and amended for my own personal use (with thanks) : It is up to you to investigate, check, double-check and check yet again before you make any decisions or take any action based on any information you glean from any of my posts. Although I do carry out careful research before posting and never intend to mislead or supply out-of-date or incorrect information, please do not rely 100% on what you are reading. Verify everything in order to protect yourself as you are responsible for any action you consequently take.
  • mcpitman
    mcpitman Posts: 1,267 Forumite
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    Take your £3k and buy a car with that. Plenty of good reliable cars around for that money.

    Do not get finance as the only place that would lend someone money with no income, is probably called "Dodgy Bob's Finance".
    Life isn't about the number of breaths we take, but the moments that take our breath away. Like choking....
  • Grumpy_chap
    Grumpy_chap Posts: 14,833 Forumite
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    First, work out what your needs are for a car.
    Second, buy a car to meet those needs within the £3k budget you have available.
    Seeking finance when you have no demonstrable income is a non-starter.
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