Car loan help

[Maxwell90]

Hi all,

Trying to get my head round all this.

I'm currently selling my car and I’ve seen the perfect replacement for sale privately (typical).

Problem is I have my car for sale and will get hopefully £10k.

I have an existing loan with Tesco which has about £5k left.

The car I want to buy is £13900.

I was thinking about getting a top up loan from Tesco for 13900 plus the remaining amount then once I sell my existing car, re-pay the 10k from my old car then pay the remainder off monthly

Would this be do-able or do you think I will be paying silly amount back in fee's etc?

Any help would be appreciated, my man maths is taking over I think!

Edited by Maxwell90 on Tuesday 7th May 16:45

[Newc]

Everyone is about to tell you the same thing, so I'll go first.

Sell your 10k car. Pay off the loan. Buy a 5k car. Save up 10k. Sell 5k car for 4k. Buy 14k car. Make your money work for you instead of paying interest.


As I suspect you'll ignore that, then unless you are looking for a LHD Delorean painted matt gold there will be another car out there in your spec. So sell your existing car first, then look for the next one. Don't faff about with double loans and short term repayments etc etc.

[jonny70]

Maxwell90 said:

Hi all,

Trying to get my head round all this.

I'm currently selling my car and I’ve seen the perfect replacement for sale privately (typical).

Problem is I have my car for sale and will get hopefully £10k.

I have an existing loan with Tesco which has about £5k left.

The car I want to buy is £13900.

I was thinking about getting a top up loan from Tesco for 13900 plus the remaining amount then once I sell my existing car, re-pay the 10k from my old car then pay the remainder off monthly

Would this be do-able or do you think I will be paying silly amount back in fee's etc?

Any help would be appreciated, my man maths is taking over I think!

Edited by Maxwell90 on Tuesday 7th May 16:45

Call them and ask them.

[jonny70]

Newc said:

Everyone is about to tell you the same thing, so I'll go first.

Sell your 10k car. Pay off the loan. Buy a 5k car. Save up 10k. Sell 5k car for 4k. Buy 14k car. Make your money work for you instead of paying interest.


.

It his money ,if he can afford it then why not? You amy wish to spend your money dining out with your wife in a 5 star restaurant every Friday night or following your football club around the country etc

If he borrows 10k over 4 years at 6 % , then he will pay 1200 quid in total interest, thats 300 quid a year to get the car he wants today rather than saving for 4 years. Its all about what he wants to spend his money on and as long as he can affford it!

For 300 quid a year interest assuming the condition I mentioned he gets a new car today instead of in 4 years time, by getting a new car today he will probably save on road tax, the car will probably be more economical and his newer car will be much less likely to break down.(so in theory amy be a better economical decision to borrow the money)

[Zippee]

jonny70 said:

Newc said:

Everyone is about to tell you the same thing, so I'll go first.

Sell your 10k car. Pay off the loan. Buy a 5k car. Save up 10k. Sell 5k car for 4k. Buy 14k car. Make your money work for you instead of paying interest.


.

It his money ,if he can afford it then why not? You amy wish to spend your money dining out with your wife in a 5 star restaurant every Friday night or following your football club around the country etc

If he borrows 10k over 4 years at 6 % , then he will pay 1200 quid in total interest, thats 300 quid a year to get the car he wants today rather than saving for 4 years. Its all about what he wants to spend his money on and as long as he can affford it!

For 300 quid a year interest assuming the condition I mentioned he gets a new car today instead of in 4 years time, by getting a new car today he will probably save on road tax, the car will probably be more economical and his newer car will be much less likely to break down.(so in theory amy be a better economical decision to borrow the money)

I'm so glad I'm not the only one with this mentality!!!
I agree that stupid APRs should be avoided but used sensibly there is nothing at all wrong with finance.

[jdw1234]

Newc said:

Everyone is about to tell you the same thing, so I'll go first.

Sell your 10k car. Pay off the loan. Buy a 5k car. Save up 10k. Sell 5k car for 4k. Buy 14k car. Make your money work for you instead of paying interest.


As I suspect you'll ignore that, then unless you are looking for a LHD Delorean painted matt gold there will be another car out there in your spec. So sell your existing car first, then look for the next one. Don't faff about with double loans and short term repayments etc etc.

FYI there are 3 Gold LHD DeLoreans!

"A 24K Gold plated DeLorean is a great idea, but not the most practical one. But Mr. DeLorean wasn't always concerned with the most practical approach to things, which is why the DeLorean automobile was produced in the first place. In terms of the Gold DeLoreans, there were two official Gold DeLoreans made exclusively for sale out of the American Express Christmas Catalogue. 100 Gold cars were slated to be made, but only two were made in December of 1981 under strict security at the Belfast plant. The price tag was a cool $85,000 dollars. Pretty expensive in today's standards, and this was 1981! The third Gold DeLorean was the last car to be produced (VIN 20105) and was built using spare parts made from the first two Gold DeLoreans encase anything happened to those cars. Interestingly enough, the last DeLorean produced used the saddle brown interior, which is only found on one of the original Gold DeLoreans. To see the original American Express Catalogue, stop by the DeLorean History Section of the site. Enjoy this very rare and rich section."

Source: http://www.entermyworld.com/gallery/gold-deloreans

[onesickpuppy]

jonny70 said:

Newc said:

Everyone is about to tell you the same thing, so I'll go first.

Sell your 10k car. Pay off the loan. Buy a 5k car. Save up 10k. Sell 5k car for 4k. Buy 14k car. Make your money work for you instead of paying interest.


.

It his money ,if he can afford it then why not? You amy wish to spend your money dining out with your wife in a 5 star restaurant every Friday night or following your football club around the country etc

If he borrows 10k over 4 years at 6 % , then he will pay 1200 quid in total interest, thats 300 quid a year to get the car he wants today rather than saving for 4 years. Its all about what he wants to spend his money on and as long as he can affford it!

For 300 quid a year interest assuming the condition I mentioned he gets a new car today instead of in 4 years time, by getting a new car today he will probably save on road tax, the car will probably be more economical and his newer car will be much less likely to break down.(so in theory amy be a better economical decision to borrow the money)

It would be £2,400 in interest over 4 years. 10,000 x 6% = 600 x 4 = 2,400.

[Zippee]

onesickpuppy said:

It would be £2,400 in interest over 4 years. 10,000 x 6% = 600 x 4 = 2,400.

I think you need to google how interest vs capital outstanding actually works. A 4 year loan of 10k would be circa 1200 in interest. Your example assumes no capital is repayed during the loan term.

[onesickpuppy]

Zippee said:

onesickpuppy said:

It would be £2,400 in interest over 4 years. 10,000 x 6% = 600 x 4 = 2,400.

I think you need to google how interest vs capital outstanding actually works. A 4 year loan of 10k would be circa 1200 in interest. Your example assumes no capital is repayed during the loan term.

Really? I thought they loaded all the interest up front and it was paid back in a straight line over the term. Just as well I don't work in finance then!

[jonny70]

onesickpuppy said:

Really? I thought they loaded all the interest up front and it was paid back in a straight line over the term. Just as well I don't work in finance then!

yep Only 1200 quid interest in above example. .I guess your out apply for a car loan now after being the usual pistonhead stance of cash only lol

[Irrotational]

An impromptu but great example of "flat rate" interest versus Apr!

It also shows the relativity between the two is usually around 50 percent...I.e. You pay twice as much interest on a 6 percent flat rate as you do on a 6 percent Apr.

That's why the government made quoting Apr a legal necessity and defined its calculation in law!

They even stipulate that you have to round UP to the nearest 0.1 percent....

[Roo]

Just had a quick look on the Tesco website.

£10,000 over four years is a total repayable of £11,051.

That's not bad value for money.

[big_boz]

jonny70 said:

onesickpuppy said:

Really? I thought they loaded all the interest up front and it was paid back in a straight line over the term. Just as well I don't work in finance then!

yep Only 1200 quid interest in above example. .I guess your out apply for a car loan now after being the usual pistonhead stance of cash only lol

Unless its a front loaded loan...which isn't as uncommon as you might think, especially with high risk loans, even on cars.

People in general are stupid and many fall for this underhand but apparently "transparent" tactic.

[Maxwell90]

Decided to just sell the car and get a small top up loan off Tesco at 5.2%. Got told it’s always good to build up the credit rating for when applying for a mortgage in future and I’m impatient so it's a no brainer


Cheers guys!