First time buyer with car finance

Suffolk04

Hi 👋 I'm hoping for some information regarding my predicament 

Me and my oh are looking at getting our own place possibly later this year but not sure if the car finance is holding me back 
So my basic salary is 23.5k, but usually 30k with bonus, hers is around 19k. Both have credit score in the excellent range and it's only me who has a 14k car lease that ends February next year.

I'd love to keep the car, but not sure if I got a loan out now how that would affect our application chances, or see if we can get a mortgage first before anything else. 

Any comments wether positive or negative welcome 

SuseOrm

Apparently if you take a credit it affects your score for six months and it will definitely affect your affordability.  

ACG

It is unlikely a one off credit check will be a deal breaker to getting a mortgage. 
What will probably play a bigger part is what the monthly repayments are. That will probably affect how much you can get. 

chanz4

let the car go back, by a cheap one then once complete buy one

Suffolk04

Thanks for the replies, currently paying £340 a month on the car finance, and that's pretty much my only outgoing apart from £130 a month board to my parents. 

Houses are quite cheapish in the midlands, looking at one around the 170k mark and both got 10k locked in lisa account's. 

chanz4 said:

let the car go back, by a cheap one then once complete buy one

That's what I was thinking, but wasn't sure how much having it would affect our chances with having that as my only debt 

chanz4

go on halifax calculator run both with and without the car, its suprising how much a car can effect

CottonTail

£340 is a lot for a car loan on your income. Get something on lease for £99 until you have bought a house and moved in adjusted to all the extra stuff that inevitably comes with house purchase. Then if all looks flush purchase another car with a bigger monthly premium if you feel comfortable to do so.
Paying £130 current rent and all bills is going to be a big shock to the system in the real world especially with rising energy costs!

Suffolk04

Thanks again for all the replies, feel like the right thing is to sell the car, currently owe 14k and motorway value it at 19k, so yes it's definitely a no brainer, just wanted some advice from complete strangers lol 

CottonTail said:

£340 is a lot for a car loan on your income. Get something on lease for £99 until you have bought a house and moved in adjusted to all the extra stuff that inevitably comes with house purchase. Then if all looks flush purchase another car with a bigger monthly premium if you feel comfortable to do so.
Paying £130 current rent and all bills is going to be a big shock to the system in the real world especially with rising energy costs!

I did live on my own, private rent so know what the bills are like and got furniture etc all stored ready moved back home to save, managed to clear £2k credit card and save 8k deposit, but appreciate the advice, 

Windofchange

Suffolk04 said:

Thanks again for all the replies, feel like the right thing is to sell the car, currently owe 14k and motorway value it at 19k, so yes it's definitely a no brainer, just wanted some advice from complete strangers lol 

But you said the car is on a lease? Is this a PCP contract? If so, you aren't selling the car as you don't own it. Are you allowed to break contract early? Otherwise yes, echo the above about getting rid and then getting one again if you have to once mortgage is sorted out. 

Suffolk04

Yeah sorry its on a pcp contract over 3 year's, this is up in Feb 2023, but thought I could sell to motorway.co.uk or wbac, they settle the remaining balance and I receive whatever is left, or is that wrong?

Noneforit999

Suffolk04 said:

Yeah sorry its on a pcp contract over 3 year's, this is up in Feb 2023, but thought I could sell to motorway.co.uk or wbac, they settle the remaining balance and I receive whatever is left, or is that wrong?

As long as you clear the settlement that is perfectly fine. This is the reason PCP's can be better than leases as you can simply sell the car and pay the settlement figure, its far harder to get out of a lease. The downside to a PCP is that the whole value of the vehicle shows on your credit report so a £30k car would show the £30k + Interest as what you 'owe'. 

Who is the PCP lender? Assuming its one of the dealer finance companies so BMW/Mini/VW etc, selling the car and paying the settlement is usually fine but give them a call to confirm. You may need to call them to get the exact settlement figure anyway so just ask about selling the car to pay it off.

WBAC and others are offering good prices at the moment so if you have had the car 2+ years, you may be able to sell it and break even with the settlement or possible have some equity depending on your deposit amount and APR.