Financing a car purchase from friend?

nicki_2

A friend of my sister-in-law is selling her N-reg car to finance the purchase of her wedding dress as her and her fiance don't need 2 cars. She's offered it to us for just £1200 with a MOT (passed it on Friday), new exhaust, tyres, a CD player and Tax until May. She paid £2000 for it just over a year ago.

We like the car and can't see anything wrong with it BUT we have no idea how to best finance the purchase.

We have just over £1800 available on our credit card which we could use to initially pay insurance (quoted at just over £1000 best buy unless partner can get a "company car no claims discount" letter from his previous employers) and then we WILL put the money away for the following years payments to make one lump sum payment (instead of by DD installmentswhere with most companies we would end up paying more so I've heard) when it's due for renewal (after shopping around for a better deal if possible of course).

However, our monthly minimum on the credit card are starting to get very expensive and likely to max out my monthly payment so I'd rather just take out a loan to pay off the credit card, pay for the car and take care of the insurance for this year. At the moment our monthly expenses on the credit card & transport cost for my partner to get to work come to a grand total of £284 minimum so I think a loan is the best way to go as we should be able to afford it without too much trouble.

Any suggestions as to another way to finance the car/insurance while still making payments to the credit card (£144 a month - personally set minimum fixed payment)?

We need to have this sorted ASAP otherwise the friend will advertise it in their local paper and we're likely to loose this car - it's the best deal we've had so far.

Rafter

Nicki,

If you are already finding it tough to meet minimum payments can you really afford to take on more debt for a car?

Even if it is a good deal, with insurance, tax, fuel etc a car is likely to cost you £250+ per month.

Putting things like Insurance onto a loan or card where you only intend to make minimum payments lulls you into a false sense of security. You could end up taking 5 years to pay this years insurance bill which is not a good move.

If you really think a car will work out cheaper you need to make sure you pay at least £100 per month of your credit card for the insurance bill.

As for raising the purchase price, a loan might be an option, but make sure it is over a short period of time. A £1200 car is unlikely to last more than a couple of years and you don't want to still be paying it off after it has been scrapped.

Good luck.

R.