PCP and credit rating/history advice

ABAFT

Hi all

Wondered if anybody in the know maybe able to advise.

6 years ago we got into a lot of debt trouble and myself and my wife went down the IVA route. We cleared the IVA early (after four years) and have been building our credit ever since and saving towards buying our first house. We are in our early forties so time not on our side there!

anyway we now both earn good money, have little debt and around £3.5k per month disposable income. I’m just about to move jobs which is more money but doesn’t come with the company car I currently have so I need to buy something and something reliable as I will be committing 150 miles on the 2-3 days I’m in the office. I’m willing to spend the additional money I receive in buying a nice car.

The IVA removes from my credit report later this month but my score is still low and some of the defaulted payments went into August 2018 so these will show on my credit report. Does anyone know if I stand a good chance of getting approved for PCP on the lower rate with a few defaulted payments visible on my credit report from 6 years ago?

my credits also taken a bit of a bashing last month as some undesirable opened a load of car insurance in my name that’s fraudulent but Experian have put a note against this and the relevant bank are dealing with it.

any help appreciated 

Nasqueron

The fake score can be ignored

Defaulted payments would be a red flag to some lenders, depending on age, some less so than others

With around £3.5k, how much are you saving, what is your savings pot and why do you need PCP on a brand new car rather than something like public transport to tide you over until you can get better rates?

ABAFT

Nasqueron said:

The fake score can be ignored

Defaulted payments would be a red flag to some lenders, depending on age, some less so than others

With around £3.5k, how much are you saving, what is your savings pot and why do you need PCP on a brand new car rather than something like public transport to tide you over until you can get better rates?

I save approx £2000 per month. With some of it locked in ISA’s.

the default payments are 6 years old so will have to see how it goes but the journey to the new office is 150 miles there and back so ideally need a car. The train is 3 changes and a fortune.

we are fairly active in our lives and couldn’t live without a car

Brie

are you using much credit?  overdraft? cards? your actual car insurance paid monthly? phone contracts?  

ABAFT

Brie said:

are you using much credit?  overdraft? cards? your actual car insurance paid monthly? phone contracts?  

I have a credit card but it’s currently cleared. It has a limit of £3.5k but I only use it to improve my credit. Most it ever gets is up to about £300.

i don’t have any overdraft and I don’t have car insurance as currently have company car. The only insurance in my name is the fraudulent stuff :-(

I do have three contracts on my report. One is my daughters and the other is an old one I have just replaced but the old one is still showing. They should clear off shortly 

BoGoF

At the end of the day the only way you will find out a) if you get approved and b) the APR is to apply. We are only guessing.

My guess is a possible highish rate. To be honest I don't know what the 'going rate' is on PCP these days.

CliveOfIndia

ABAFT said:

Nasqueron said:

The fake score can be ignored

Defaulted payments would be a red flag to some lenders, depending on age, some less so than others

With around £3.5k, how much are you saving, what is your savings pot and why do you need PCP on a brand new car rather than something like public transport to tide you over until you can get better rates?

I save approx £2000 per month. With some of it locked in ISA’s.

the default payments are 6 years old so will have to see how it goes but the journey to the new office is 150 miles there and back so ideally need a car. The train is 3 changes and a fortune.

we are fairly active in our lives and couldn’t live without a car

So how much have you got saved up so far?  £2000 a month must have built up (or very soon will) a pretty healthy nest egg.  I don't disagree at all that a "decent" car is highly desirable if you're regularly doing a 150-mile round trip.  But you don't need a brand-new car - with the savings you've built up, you ought to be able to afford a very decent used car.

And actually, that might be a better option for another reason as well.  I suspect you could well end up going above the annual mileage allowance for most common PCP agreements, or else having to pay more for a higher allowance.

ABAFT

CliveOfIndia said:

ABAFT said:

Nasqueron said:

The fake score can be ignored

Defaulted payments would be a red flag to some lenders, depending on age, some less so than others

With around £3.5k, how much are you saving, what is your savings pot and why do you need PCP on a brand new car rather than something like public transport to tide you over until you can get better rates?

I save approx £2000 per month. With some of it locked in ISA’s.

the default payments are 6 years old so will have to see how it goes but the journey to the new office is 150 miles there and back so ideally need a car. The train is 3 changes and a fortune.

we are fairly active in our lives and couldn’t live without a car

So how much have you got saved up so far?  £2000 a month must have built up (or very soon will) a pretty healthy nest egg.  I don't disagree at all that a "decent" car is highly desirable if you're regularly doing a 150-mile round trip.  But you don't need a brand-new car - with the savings you've built up, you ought to be able to afford a very decent used car.

And actually, that might be a better option for another reason as well.  I suspect you could well end up going above the annual mileage allowance for most common PCP agreements, or else having to pay more for a higher allowance.

Thanks but I’m not willing to use that money as we want to get on the property ladder asap and that is saving up for our mortgage deposit 

BoGoF

ABAFT said:

CliveOfIndia said:

ABAFT said:

Nasqueron said:

The fake score can be ignored

Defaulted payments would be a red flag to some lenders, depending on age, some less so than others

With around £3.5k, how much are you saving, what is your savings pot and why do you need PCP on a brand new car rather than something like public transport to tide you over until you can get better rates?

I save approx £2000 per month. With some of it locked in ISA’s.

the default payments are 6 years old so will have to see how it goes but the journey to the new office is 150 miles there and back so ideally need a car. The train is 3 changes and a fortune.

we are fairly active in our lives and couldn’t live without a car

So how much have you got saved up so far?  £2000 a month must have built up (or very soon will) a pretty healthy nest egg.  I don't disagree at all that a "decent" car is highly desirable if you're regularly doing a 150-mile round trip.  But you don't need a brand-new car - with the savings you've built up, you ought to be able to afford a very decent used car.

And actually, that might be a better option for another reason as well.  I suspect you could well end up going above the annual mileage allowance for most common PCP agreements, or else having to pay more for a higher allowance.

Thanks but I’m not willing to use that money as we want to get on the property ladder asap and that is saving up for our mortgage deposit 

But you are willing to use the additional salary you get for a 'nice' car which is really a want rather than a need.

ABAFT

BoGoF said:

ABAFT said:

CliveOfIndia said:

ABAFT said:

Nasqueron said:

The fake score can be ignored

Defaulted payments would be a red flag to some lenders, depending on age, some less so than others

With around £3.5k, how much are you saving, what is your savings pot and why do you need PCP on a brand new car rather than something like public transport to tide you over until you can get better rates?

I save approx £2000 per month. With some of it locked in ISA’s.

the default payments are 6 years old so will have to see how it goes but the journey to the new office is 150 miles there and back so ideally need a car. The train is 3 changes and a fortune.

we are fairly active in our lives and couldn’t live without a car

So how much have you got saved up so far?  £2000 a month must have built up (or very soon will) a pretty healthy nest egg.  I don't disagree at all that a "decent" car is highly desirable if you're regularly doing a 150-mile round trip.  But you don't need a brand-new car - with the savings you've built up, you ought to be able to afford a very decent used car.

And actually, that might be a better option for another reason as well.  I suspect you could well end up going above the annual mileage allowance for most common PCP agreements, or else having to pay more for a higher allowance.

Thanks but I’m not willing to use that money as we want to get on the property ladder asap and that is saving up for our mortgage deposit 

But you are willing to use the additional salary you get for a 'nice' car which is really a want rather than a need.

I don’t understand the problem with that though??? I’m not going to affect how much I can save or my lifestyle. I can afford it and work hard. It’s not like I’m trying to buy a Ferrari! Or trying to buy something I can not afford. 

Was only asking for advice around the feasibility of being accepted for PCP 

CliveOfIndia

ABAFT said:

BoGoF said:

But you are willing to use the additional salary you get for a 'nice' car which is really a want rather than a need.

I don’t understand the problem with that though??? I’m not going to affect how much I can save or my lifestyle. I can afford it and work hard. It’s not like I’m trying to buy a Ferrari! Or trying to buy something I can not afford. 

Was only asking for advice around the feasibility of being accepted for PCP 

The advice you've been given is well-intentioned.  Whilst it's not for anyone here to tell you what you should or should not spend your money on, the advice is given in good faith.

To answer your question, you won't know until you apply.  Bear in mind that even if you do get accepted, the negative marks on your credit history could well mean you're offered a higher APR.

In a similar vein, when you come to apply for a mortgage, the PCP will be taken into account as an existing debt, so again this could well affect the APR you're offered.

And home-ownership brings with it inevitable costs, even if nothing more than routine maintenance and repairs.

All these things in conjunction would make it prudent to buy a decent used car outright, for far less money - rather than saddling yourself with more debt unnecessarily.

But if you do decide to go for the PCP option, it would be a good idea to get a realistic estimate of your annual mileage - as I alluded to earlier, if you're doing pretty high mileage then this will affect the price you'll be paying.