PCP - Affordability - Credit Check

Supermikey1

I am getting a car on PCP (This is not a discussion on PCP's) I will have a £14k deposit when I sell my car - The PCP will be costing about £350 per month.

If I decided keep some or a lot of the deposit (I know, more interest but comfort blanket) the monthlies would them be about £650.

I know I can afford both and I have a very good credit rating.

The question is, there MAY be a small chance that I will fail an affordability check with on a higher payment (even though I've got the cash to cover it if needed).

1/ If I put another application forward immediately, will be be refused credit again with the lower repayment, if my previous application was rejected?

2/ If I have savings, would this be taken in to account or is it just monthly disposable income. (An expert's reply on this would be great)

Thanks

BoGoF

1) Maybe, nobody can say for sure.
2) Your savings are irrelevant. Nit sure what sort of 'expert' you need for this. Does the application ask for details of savings? I'll say not so how would a lender know about them and even if they did you could blow them next week.

If you are basing your self-declared 'very good' credit rating on a score from a CRA then you can ignore that.

DrEskimo

There are much cheaper ways to borrow savings (although not something I would recommend personally) than through a secured car finance agreements.

Personal loans
Interest free purchase credit cards
Interest free transfer credit cards

Why not use your savings and then utilise any of these other finance products for your liquid cash availability?

Alternatively, you will have a spare £200/month by going with the lower payment so won't take too long to rebuild some savings if you are diligent enough to put it away each month.

All that is to say, I would strongly recommend having a fully funded emergency fund and going with a cheaper car with a lower payment, but your choice.

Nasqueron

You don't need an expert for 2 

Savings are not, and never will be, considered as part of affordability checks - you could spend them tomorrow and have nothing left

Supermikey1

Thanks for your comments, all very helpful

martinbainbridge1975

one thing I would not do is put a massive deposit down on PCP, as you will never see the money again in equity at the end. i believe the deposit is capped at around at 30%.  all down to personal preference but I would not put more than 10% down providing you can afford the payments 

DrEskimo

martinbainbridge1975 said:

one thing I would not do is put a massive deposit down on PCP, as you will never see the money again in equity at the end. i believe the deposit is capped at around at 30%.  all down to personal preference but I would not put more than 10% down providing you can afford the payments 

It's all 'lost money' however you divide it up.
If you put away the difference in monthly payments between a low deposit and a high deposit scenario, and add any equity in at the end, you will more or less end up with the same amount regardless of which approach you take.

The reason I say 'more or less' is that you will actually end up with more at the end if you use a higher deposit, as it will reduce the amount of interest you pay overall (and you can use the extra you save on the monthlies each month into a high interest savings account and earn even more on it).