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
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 :PButter 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!!
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