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  • FIRST POST
    • Jimmy9012
    • By Jimmy9012 24th Jun 19, 2:50 PM
    • 38Posts
    • 4Thanks
    Jimmy9012
    Loan affordability, can I afford it?
    • #1
    • 24th Jun 19, 2:50 PM
    Loan affordability, can I afford it? 24th Jun 19 at 2:50 PM
    Hi folks,

    So, we will be moving in to our very own home next month (first time buyers). So, all cash we had has gone to the deposit.

    My partner has health issues and she is starting to struggle with that each day. Due to this, and as the journey to her work is a little longer, she could really do with a comfortable car. The small car is not comfortable at all, very bumpy and not going to help her condition. Its not something we would get any finance support for through any motability type scheme, so would have to be self financed.

    As all the cash has gone to the deposit, and as she needs it now (when we move in a few weeks so it does not exacerbate her condition), I feel stuck as to what to do. We would want to upgrade to a car that is larger for future family (no children yet), that will last us a long time, and that is comfortable. Even decent used look to be about 22k. And, as I have no funds left to buy now, that looks like the only option is to do a large loan... do I have any other options? Maybe lease (but doesnt that cost more)?

    These are our finances once we move:
    Monthly Income Details[/b]
    Monthly income after tax................ 3616
    Partners monthly income after tax....... 718
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 4334


    Monthly Expense Details

    Mortgage................................ 1070
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 35
    Council tax............................. 150
    Electricity............................. 41
    Gas..................................... 32
    Oil..................................... 0
    Water rates............................. 37
    Telephone (land line)................... 0
    Mobile phone............................ 0
    TV Licence.............................. 12.5
    Satellite/Cable TV...................... 82
    Internet Services....................... 9.99
    Groceries etc. ......................... 240
    Clothing................................ 50
    Petrol/diesel........................... 160
    Road tax................................ 0
    Car Insurance........................... 30
    Car maintenance (including MOT)......... 12.5
    Car parking............................. 0
    Other travel............................ 408
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 25
    Buildings insurance..................... 11.5
    Contents insurance...................... 11.5
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 100
    Haircuts................................ 50
    Entertainment........................... 40
    Holiday................................. 0
    Emergency fund.......................... 50
    Total monthly expenses.................. 2657.99



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0
    Total Assets............................ 0



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 253500...(1070).....4.99
    Total secured & HP debts...... 253500....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Virgin Card....................3100......35........0
    Total unsecured debts..........3100......35........-



    Monthly Budget Summary

    Total monthly income.................... 4,334
    Expenses (including HP & secured debts). 2,657.99
    Available for debt repayments........... 1,676.01
    Monthly UNsecured debt repayments....... 35
    Amount left after debt repayments....... 1,641.01


    So, I think we could afford it, I am just not sure it feels sensible. We could get a far older car, but then due to age we get less use of it for the similar investment...

    I think 22k would be about 400 PCM for 5 years...

    What do you think we should do?
Page 2
    • JayRitchie
    • By JayRitchie 24th Jun 19, 6:32 PM
    • 189 Posts
    • 197 Thanks
    JayRitchie
    Just to check - do you also have a car or is this the family car? Would you also be driving it? How much is her current car worth? Would you be able to trade it in to provide some of the money?
    • enthusiasticsaver
    • By enthusiasticsaver 24th Jun 19, 6:39 PM
    • 8,736 Posts
    • 20,258 Thanks
    enthusiasticsaver
    If you are on the verge of buying your first house that is the worst time to saddle yourself with a large loan and quite frankly £22k for a car is ridiculous with nothing to put towards it. You would be really foolish to take out that much in borrowing and if your mortgage company knew you were considering it they could withdraw the offer. Your mortgage was worked out as affordable on your current circumstances which of course shows no such loan. Also only paying £35 towards your credit card is not enough. Your partner does not earn a lot. You do not have children and you are considering saddling yourself with a quarter of a million mortgage and a £22k loan. If she has managed alright with the current car why choose now to change it? How much further is her journey to work when you move?

    I would wait until you are moved in and any immediate bills/work done before even considering buying another car. If you have that much disposable income see how long it takes to save up £5k for a car and borrow another £5k maybe when your existing credit card is paid off on a 0% card. £10k is more than enough for a 2nd hand car.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Jmaho
    • By Jmaho 24th Jun 19, 7:01 PM
    • 16 Posts
    • 15 Thanks
    Jmaho
    I couldn't ever imagine spending 22k on a car but maybe that's just me!I would however review your mortgage offer. I work in the industry and you can get a much cheaper rate than 4.99% even at 95% LTV
    • BrassicWoman
    • By BrassicWoman 24th Jun 19, 7:08 PM
    • 2,171 Posts
    • 8,365 Thanks
    BrassicWoman
    Agree, 2018 is nearly new. Get to '14 or earlier. A decent car will easily go 150k these days and be reliable as long as you service it.
    May 19 grocery challenge £100.79/ £200
    • Gycraig
    • By Gycraig 24th Jun 19, 7:26 PM
    • 9 Posts
    • 17 Thanks
    Gycraig
    You want to spend more than two years of your partners salary to buy her an expensive car when she might not even be working soon.

    22k on a Kia that is gonna plummet in value faster than you pay it off. Whilst simultaneously thinking of starting a family. You do you it's your money but just seems crazy to me.
    • tunnie123
    • By tunnie123 26th Jun 19, 6:53 AM
    • 13 Posts
    • 9 Thanks
    tunnie123
    We have just gone from a Citroen c1 to a second hand all singing all dancing Dacia Duster 18k miles.... it cost us 8k much bigger and more comfortable... no way do you need to spend 22k im assuming you are looking at a range rover....
    • DCFC79
    • By DCFC79 26th Jun 19, 7:05 AM
    • 34,567 Posts
    • 21,867 Thanks
    DCFC79
    Your wanting to start a family in the future yet your aanting to spend £22k on a car, ok not in cash but on finance. You would pretty much be stealing from your future self. Work out your priorities then rethink the idea of buying a car.

    I understand the reasoning for wanting a vehicle that's comfier, it makes the driver easier of the seat is comfier.
    Last edited by DCFC79; 26-06-2019 at 8:35 AM.
    • nic_c
    • By nic_c 26th Jun 19, 8:10 AM
    • 2,006 Posts
    • 1,061 Thanks
    nic_c
    I would reassess you finances taking into account money for house upkeep. You don't say whether its brand new or not, will it need redecorating in the next few years, what about new appliances, etc. You may also want to reassess based on your partner not returning to work for a few years and also the cost to start a family, you say future but are we talking, 1, 3, 5 years away?

    Surely it makes sense to wait a year after moving in to then be able to get an understanding of costs and see how much saved over the year. Budgeting as much for emergencies as haircuts may prove inadequate.
    • foxy-stoat
    • By foxy-stoat 26th Jun 19, 8:32 AM
    • 4,617 Posts
    • 2,734 Thanks
    foxy-stoat
    Currently Peugeot 107. The seats are not great, especially for longer drives (even 40 minutes), and the ride leaves a lot to be desired. You can feel every bump.

    We are considering something like a slightly old (2018) Kia Sportage, or Hyundai Tucson. That would give room for a family and many comforts that will keep her mobile. For example, for her motorway drive they both have cruise control. They both are automatic, so she does not have to worry about using her left foot at all (yes, easy for us - but over time it will exacerbate her issues)... the lumbar support and seats also feel very comfortable compared to the Peugeot.

    Its not like we are looking at Volvo XC60's or anything. The Kia and Hyundai are mid level SUVs with many comforts that would help her. Older models do not have the same kit list, and seem a little pointless to move to...
    Originally posted by Jimmy9012
    Sounds like you have already justified going from an old £1000 car to a £22,000 newish car.

    Only advice to give you is to read the contract on whatever finance you take and understand that you will be committing to the full length of the term, work out the mileage and dont be talked into putting down less mileage to get the PCP cheaper and you will be charged at the end for wear and tear. Oh and if it is written off then you will be left with no car and no money, at best.

    If only there was a cheaper old mid range 4x4 which are comfortable that wasn't £22,000 that you could buy with say £6,000 cash;

    Nissan Qashqai
    Skoda Yeti
    Mitsubishi ASX
    Peugeot 2008
    Toyota RAV4
    Dacia Duster
    Volkswagen Tiguan
    Hyundai ix35
    Vauxhall Antara
    • Kentish Dave
    • By Kentish Dave 26th Jun 19, 1:54 PM
    • 408 Posts
    • 624 Thanks
    Kentish Dave
    I had a B7 model RS4, one of the best Audis ever made. After five years’ ownership from new I sold it with 22,000 miles on the clock, in genuinely immaculate condition, for £22,000.

    The idea of someone spending that on a new Kia is bonkers.
    • foxy-stoat
    • By foxy-stoat 26th Jun 19, 3:28 PM
    • 4,617 Posts
    • 2,734 Thanks
    foxy-stoat
    I had a B7 model RS4, one of the best Audis ever made. After five yearsí ownership from new I sold it with 22,000 miles on the clock, in genuinely immaculate condition, for £22,000.

    The idea of someone spending that on a new Kia is bonkers.
    Originally posted by Kentish Dave
    As much as I love the RS4 - spending £50,000-£60,000 on a new one and driving 4,400 miles a year also seems bonkers. Each to their one.
    • sheepy21
    • By sheepy21 26th Jun 19, 3:53 PM
    • 205 Posts
    • 197 Thanks
    sheepy21
    Why on earth would she need a 22k car? Her health is dodgy, so surely she might not even work and then youíve sunk hundreds every month into a car she doesnít need. 5k will you get a very nice family sized car.
    • onwards&upwards
    • By onwards&upwards 27th Jun 19, 10:28 AM
    • 673 Posts
    • 1,342 Thanks
    onwards&upwards
    Donít assume you need a big car for future kids.

    They are really small to start off with and take years and years to get bigger.

    If you can fit two car seats itís big enough. My friend had a Kia picanto for years when his kids were small, two buggies fit in the boot fine if you knew how!
    • onwards&upwards
    • By onwards&upwards 27th Jun 19, 10:30 AM
    • 673 Posts
    • 1,342 Thanks
    onwards&upwards
    Some good tips here:

    https://itstillruns.com/car-seats-more-comfortable-4814424.html
    • username901
    • By username901 27th Jun 19, 4:32 PM
    • 16 Posts
    • 7 Thanks
    username901
    A Citroen cactus is one of the comfiest cars you can buy, was even smoother than the lexus NX I replaced it with. Much nicer ride than a friends range rover or bmw XM6.

    Looks might be marmite, but you'll be sat it in not looking at it

    Should get s fairly new one on auto for near half that
    • meer53
    • By meer53 27th Jun 19, 7:31 PM
    • 9,483 Posts
    • 13,879 Thanks
    meer53
    I'm struggling with the idea of someone who finds a 40 min drive difficult and thinks a £22k car will make it better.
    • ChrisJ1988
    • By ChrisJ1988 28th Jun 19, 3:49 PM
    • 55 Posts
    • 21 Thanks
    ChrisJ1988
    Rather than questioning your life choices, I will answer your question.

    With your income you will easily be able to get enough 0% balance transfer credit cards to cover the cost over 2 years.

    This is how I would (and have done) do it.

    I would apply for a halifax clarity credit card which has a 0% fee on money transfers but has an APR so it is important to pay the balance off the same day using balance transfer credit cards.

    On the same day as applying for the clarity credit card apply for 0% balance transfer credit cards. I find applying for many credit cards on the same day means they all always get approved.

    once you have your 2 or 3(depending how much credit you want/need) 0% balance transfer cards and your 0% fee clarity credit card and they are all activated.

    Money transfer the full amount available from the clarity card to your bank account.
    This next bit is important
    On the same day do a balance transfer to pay off the clarity credit card with your 0% fee balance transfer card.
    If both payments go through on the same day you will not pay any interest.
    If the balance transfer is delayed by a day you will pay one days interest. I find doing it early to mid week best.

    Rinse and repeat until you have the money you want in your bank account. Pay the minimum payments each month then before the 18-36 months 0% interest free period is done pay off the full balances.

    Roughly speaking your minimum payments will be around £200-£400 per month based on transfering 20k into your bank account.

    You will then have the 0% time period to save up and pay the remaining balances which shouldnt be a problem with your income.

    If you do end up paying interest for one day on the clarity credit card you are looking at less than £20.

    Its really not that scary and as long as you dont slip up it is the by far the cheapest way to borrow money.
    Last edited by ChrisJ1988; 28-06-2019 at 3:53 PM.
    • jlaw4
    • By jlaw4 14th Jul 19, 11:05 AM
    • 111 Posts
    • 68 Thanks
    jlaw4
    Just to add some things from a fellow disabled person that has a horrendous commute and drives an automatic...

    Changing the car will not change some of the things that added time on her commute will do, there are no quick fixes to having longer sat in ANY car. She'll feel it for a few months AT LEAST. Be more tired, ache a lot more.

    You do not need a £22k car for her to be comfy. I have a 62 plate Astra Elite Auto. Its top of its range, has heated seats and is a dream to sit in. I paid £7200 for it a few years ago (2016) so not mega bucks and i now own it outright. The car being automatic should be your focus not a 4x4.

    You need to consider the following things that you won't have:
    Insurance - it won't be cheap to insure a nearly new car and autos are generally more expensive anyway so theres always a bit more to pay.
    Fuel - They aren't as fuel efficient, certainly no where near as the dinkycar you have now. It can cost me £50 a week in fuel from commuting and general tinkering.
    Road Tax - mine is £250 a year, some can be higher or lower (most are lower now ) but its a factor. I pay monthly around £20 but its an extra expense i incur from driving an auto.
    Choice - theres lots out there and i do (rarely but cherish it when i do) drive my dads jag xf 60 plate diesel, its a dream to drive and very comfy and it was £10K.

    Just wanted you to go into buying it actually considering HER. not the car. it won't make as much difference as you'd think. Go and look and cars 5 years plus and test drive them (i'd wait at least 3 months after getting your house) as you may find something much cheaper suits her better.
    the commute may not effect her as much as you think or a lot more, the ultimate truth is this has been over thought from a 'potential problem' to it WILL be an issue. until shes driving there every day she won't know. Consider working hours too, could she set off earlier/later to avoid sitting in more traffic (i changed my start and finish time by 30 mins and it knocked quite a lot off)
    is there any positions that offer more WFH access? theres SO many options than just plumping for a £22k upgrade in car. At least explore them first and give her a good few months to adjust first.

    Good luck!
    J x
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