Loan for car with low early repayment fees

Unicorn79

Hi there

I am looking for recommendations on loans or car payment plans on a car purchase of around £10k with low (or no) exit fees.

I am on a low income and on UC and currently have a 2012 small engined car.  I am due inheritance over the coming months and would really like to update my old car with these funds.

Looking for advice on where I can look to help me with this, is there a way I can compare early exit fees?

MEM62

Waiting for your inheritance would be the obvious plan.

molerat

Agree with waiting.  On a low income and reliant on UC you are not very likely to get the best rates on a loan.  Early exit fees as such are usually 2 months interest so are dependent on the interest rate, the higher the rate the slower the capital pays down so that 2 months interest is relatively much higher.

Unicorn79

Thank you, the inheritance amount would take me over the savings threshold for UC. So if I wait until the inheritance clears, this would take me out of the UC claim. Then I would have to apply again, as my income is low so the savings  wouldn’t last me long..

MEM62

Unicorn79 said:

Thank you, the inheritance amount would take me over the savings threshold for UC. So if I wait until the inheritance clears, this would take me out of the UC claim. Then I would have to apply again, as my income is low so the savings  wouldn’t last me long..

What difference does that make?  At some point the money will be in your account.  Whether you the use it to clear the loan or to buy the car at the point you receive it is irrelevant.  And I am pretty sure that, as long as the money does not remain in your account, the UC claim is not impacted.      

Unicorn79

MEM62 said:

Unicorn79 said:

Thank you, the inheritance amount would take me over the savings threshold for UC. So if I wait until the inheritance clears, this would take me out of the UC claim. Then I would have to apply again, as my income is low so the savings  wouldn’t last me long..

What difference does that make?  At some point the money will be in your account.  Whether you the use it to clear the loan or to buy the car at the point you receive it is irrelevant.  And I am pretty sure that, as long as the money does not remain in your account, the UC claim is not impacted.      

That is a really good point I did not think of.  I guess I am coming to terms with the fact I do not have to specifically advise them the inheritance amount, just the capital I will have and details of big purchases I have spent this on.  Along with validity it is not DoA - which I do not think this is in this case.

MEM62

If you buy yourself a car, you buy yourself a car.  That is not depravation of assets.  The same would apply if you paid off any debt that you have.  These are both legitimate expenses.