Can you buy parts with a car loan?
Discussion
Hey guys,
I was just chatting to a friend about car loans and we got a little stuck.
When taking out a car loan (not a car finance) are you ablle to use the loan to buy the car and parts?
For example, you take out a £10,000 car loan, could you buy a £500 car, and then spend the remaining £5000 on new wheels, suspension, brakes, etc?
Do you need to provide to the loan provider that all the money has gone towards the car?
Cheers
I was just chatting to a friend about car loans and we got a little stuck.
When taking out a car loan (not a car finance) are you ablle to use the loan to buy the car and parts?
For example, you take out a £10,000 car loan, could you buy a £500 car, and then spend the remaining £5000 on new wheels, suspension, brakes, etc?
Do you need to provide to the loan provider that all the money has gone towards the car?
Cheers
Sharted said:
It depends on the lender but generally no, you just take a loan for a car or anything else if it's not used as security there are unlikely to be any checks on the purchase.
By which I think you mean "yes"... he can buy a £500 car and £9,500 of bits. Technically speaking it could be a fraudulent application to say you are taking out a loan to buy a car and then you buy a bouncy castle instead but a car loan is just a personal loan, unless security is taken against the asset.pacoryan said:
By which I think you mean "yes"... he can buy a £500 car and £9,500 of bits. Technically speaking it could be a fraudulent application to say you are taking out a loan to buy a car and then you buy a bouncy castle instead but a car loan is just a personal loan, unless security is taken against the asset.
Well that's what I thought! Maybe it's worth talking to a lender about, although I'm not overly bothered :PI should clarify.
Lenders will lend against a car, they look at what it's worth and what you want to borrow. Nobody would lend £10000 against a £500 car and most dealers who arrange finance won't ask lenders for more than the car is worth (within reason) and I certainly don't think they'd do it to give you cash to modify it.
The way forward is to borrow the money yourself, buy what you want and spend it. Just be prepared that if you do that and sell the car later you probably won't get back what you've spent, that's just how car modifying works!!
Lenders will lend against a car, they look at what it's worth and what you want to borrow. Nobody would lend £10000 against a £500 car and most dealers who arrange finance won't ask lenders for more than the car is worth (within reason) and I certainly don't think they'd do it to give you cash to modify it.
The way forward is to borrow the money yourself, buy what you want and spend it. Just be prepared that if you do that and sell the car later you probably won't get back what you've spent, that's just how car modifying works!!
Butter Face said:
I should clarify.
Lenders will lend against a car, they look at what it's worth and what you want to borrow. Nobody would lend £10000 against a £500 car and most dealers who arrange finance won't ask lenders for more than the car is worth (within reason) and I certainly don't think they'd do it to give you cash to modify it.
The way forward is to borrow the money yourself, buy what you want and spend it. Just be prepared that if you do that and sell the car later you probably won't get back what you've spent, that's just how car modifying works!!
Yeah that makes perfect sense! Thanks for answering! Lenders will lend against a car, they look at what it's worth and what you want to borrow. Nobody would lend £10000 against a £500 car and most dealers who arrange finance won't ask lenders for more than the car is worth (within reason) and I certainly don't think they'd do it to give you cash to modify it.
The way forward is to borrow the money yourself, buy what you want and spend it. Just be prepared that if you do that and sell the car later you probably won't get back what you've spent, that's just how car modifying works!!
Butter Face said:
I should clarify.
Lenders will lend against a car, they look at what it's worth and what you want to borrow. Nobody would lend £10000 against a £500 car and most dealers who arrange finance won't ask lenders for more than the car is worth (within reason) and I certainly don't think they'd do it to give you cash to modify it.
The way forward is to borrow the money yourself, buy what you want and spend it. Just be prepared that if you do that and sell the car later you probably won't get back what you've spent, that's just how car modifying works!!
The point I was trying/failing to get across is that what you often see marketed as a car loan is actually a personal loan. I took out a car loan (as marketed) on line and I did actually buy a car, privately, with it. The lender never asked for car details in the application.Lenders will lend against a car, they look at what it's worth and what you want to borrow. Nobody would lend £10000 against a £500 car and most dealers who arrange finance won't ask lenders for more than the car is worth (within reason) and I certainly don't think they'd do it to give you cash to modify it.
The way forward is to borrow the money yourself, buy what you want and spend it. Just be prepared that if you do that and sell the car later you probably won't get back what you've spent, that's just how car modifying works!!
If a dealer was arranging financing the loan (HP in fact) would be related to the car and secured against it, thus turning up on HPI et al. My car was bought with a car loan but is HPI clear. I actually borrowed £10 more than I paid for the car to keep the numbers round, and spent it on lunch on the way home from picking it up, I don't think the lender will mind.
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