Loan for New Car

konn1ch1ha

Hi all,

I’m posting here on behalf of my wife. She wants to buy a new second hand car, the one we have seen is pretty good condition, low mileage 2010, £6,700. We have put a holding deposit on it of £250, this lasts until Thursday. 

She wants to get a loan of about £6k to pay for the car. She’s had several offers but of £4000 which isn’t enough but is low APR rate. The AA offered about 11%APR but when opted for the repayment of for 24 months, it went up and now we can’t readjust it back to 18 months, to which we have to wait 30 days for the offer to expire and reapply.

She is in full time work of an average salary, probationary period until January. 

What steps would you take from here? Are there any lenders that would be more approachable? Admiral was her first lender approved for £4000 but their interest rates have skyrocketed. 

TIA

Martin_the_Unjust

£6700 for a 12 year old car, hope you have allowed for maintenance and repairs.

konn1ch1ha

I’d agree the costs are a lot but the overall costs of second hand cars atm are criminal. I’ve seen 20 Yaris’s going for £2500. 

macman

And I hope your deposit is refundable? A deposit is a contract to purchase, unless explicitly stated otherwise. Low mileage is not always desirable, it means everything in the drivetrain will be knackered by short shopping/school run trips: a car used for motorway distances will be in much better condition.
What is an 'average salary': £38k gross?

konn1ch1ha

macman said:

And I hope your deposit is refundable? A deposit is a contract to purchase, unless explicitly stated otherwise. 
What is an 'average salary': £38k gross?

It is refundable. Salary of about £26k. 

Thanks for the advice rather than the sanctimonious comment. 

Edit: apologies, just saw the other information. Mileage is 33k

Nebulous2

I hope you / she aren't randomly applying for loans. If they are doing hard searches each time then several of them will diminish your chances. 

Use soft searches, on the lender's website, rather than general ones. These are subject to change with a full application, but will give an indication and allow you to target any full applications. 

konn1ch1ha

Nebulous2 said:

I hope you / she aren't randomly applying for loans. If they are doing hard searches each time then several of them will diminish your chances. 

Use soft searches, on the lender's website, rather than general ones. These are subject to change with a full application, but will give an indication and allow you to target any full applications. 

No, we’re being very mindful which lenders are affecting her credit score every time we search. We haven’t searched many tbh. 

Jonboy_1984

Are you looking at car finance or personal loans? 

For my last car purchase a personal loan from my bank was far less expensive than vehicle finance?

konn1ch1ha

Jonboy_1984 said:

Are you looking at car finance or personal loans? 

For my last car purchase a personal loan from my bank was far less expensive than vehicle finance?

Thanks. Will keep that in mind. 

fatbelly

Have you tried a money transfer credit card?

https://www.moneysavingexpert.com/credit-cards/money-transfers/

MalMonroe

Hi, there's some useful info in the following link from this site, too so you can contrast and compare.

https://www.moneysavingexpert.com/loans/personal-contract-purchase/

When I got my Toyota Aygo three years ago I started out on a 0% PCP. Still have the PCP - now with very small interest rate. But the car's seven years old next month and that's around the time, in my - quite long - experience of car owning, that everything starts to go wrong, drop off, rust away, etc. When I first got the car the mileage was 22,500 and it's not gone up much since then, only to 24,300 because of covid and not being able to go very far, etc. Of course not being able to go far or use it much has meant that the tyres have suffered. (So they say!) Lack of use being worse than too much use where cars are concerned.

I'd recommend a PCP, though, if you can get a good deal with a trader. Mine is with Toyota since I didn't feel I could do much better than 0% in the first instance. My repayments remain at £55.10 per month. Which, I'm told, is something that I 'wouldn't be able to get now, love'. But I think I could if I looked around!