Car loan - tricky one...
Discussion
Hello all. First Post!!!
I've got a question about how best to go about this problem I have:
I have a car worth about 8,500 bought with a bank loan. The settlement on this bank loan right now is about 10,000.
I want to purchase a more expensive car worth about 17,000.
I wish to go down the finance route again but I was refused a settlement loan recently because I am not a homeowner.
Is there another way to get the newer car that doesn't need a settlement loan? Surely the PH collective can solve this one!
P.S. I can give more info if required - I just didn't want to confuse the explanation.
P.P.S. Cheers.
I've got a question about how best to go about this problem I have:
I have a car worth about 8,500 bought with a bank loan. The settlement on this bank loan right now is about 10,000.
I want to purchase a more expensive car worth about 17,000.
I wish to go down the finance route again but I was refused a settlement loan recently because I am not a homeowner.
Is there another way to get the newer car that doesn't need a settlement loan? Surely the PH collective can solve this one!
P.S. I can give more info if required - I just didn't want to confuse the explanation.
P.P.S. Cheers.
So in summary, you owe £1500 (17%) over the value of one car, can't cover it in cash and want even more debt on a newer one? I don't mean to offend, but why would anyone lend you the money if you can't afford to pay it back?
If you -can- afford it, just save the difference for a few months and pay down the debt. Otherwise, I daresay you will find a company somewhere to sell you an expensive unsecured consolidation product but ask yourself seriously if it is the right thing to do.
If you -can- afford it, just save the difference for a few months and pay down the debt. Otherwise, I daresay you will find a company somewhere to sell you an expensive unsecured consolidation product but ask yourself seriously if it is the right thing to do.
Thanks for the reply.
The issue here is that I am hoping to P/X the current car for the newer one. The value of the car can be guaranteed this way -and- I won't have to try to spend time selling my car privately.
If I were to follow your (common sense and reasonable) suggestion, I would have to: 1. Save 1500
2. Sell car privately
3. Pay off the loan
BIG PROBLEM is that I would be without a car for the time it takes to get new finance and find the new car.
If I P/X the car then I could get a smaller loan for the remaining amount. It would work out at about another 170 a month. In reality I would be paying two loans then with a total value very close to the new car anyway.
Does that make any sense? I'm really just thinking out loud.
The issue here is that I am hoping to P/X the current car for the newer one. The value of the car can be guaranteed this way -and- I won't have to try to spend time selling my car privately.
If I were to follow your (common sense and reasonable) suggestion, I would have to: 1. Save 1500
2. Sell car privately
3. Pay off the loan
BIG PROBLEM is that I would be without a car for the time it takes to get new finance and find the new car.
If I P/X the car then I could get a smaller loan for the remaining amount. It would work out at about another 170 a month. In reality I would be paying two loans then with a total value very close to the new car anyway.
Does that make any sense? I'm really just thinking out loud.
The car will have no finance against it as it is a bank loan-you can do what you like with it. However if you need to borrow more money to get another car then you either get the ££ to clear the current loan and then take out another big loan OR carry of paying the current loan and try and get a seond loan for the amount you need. Whether a bank will lend you more money would be down to your circumstances. Fair enough getting a bank loan to get a car but to then want to change before that loan is cleared is short sighted IMO.
As Dave says, if your loan is not secured on the car (I assumed it was) then you just have to find a finance company willing to do the deal on the new car for 8.5k (17k - 8.5k PX) knowing you have an existing debt burden of 10k.
If it is secured on the car... I've not done it personally but I thought you can still PX a car with outstanding finance. The new car finance would be for as much as you need to cover the car + outstanding debt - PX value, and the finance company (or maybe dealer) settles the balance. It's a common situation, I'd expect. In your case, though, I think it's unlikely you'd get finance in this manner for more than the new car's worth so you'll still need a unsecured loan to reduce the debt first. Talk to the finance guy at the dealer to find out what they will and won't do.
Of course it's still worth contemplating if you really can service the debt now and in the future. Add the fact that you're in a weak bargaining position for purchase price, waiting can probably save you a lot of cash over your lifetime.
If it is secured on the car... I've not done it personally but I thought you can still PX a car with outstanding finance. The new car finance would be for as much as you need to cover the car + outstanding debt - PX value, and the finance company (or maybe dealer) settles the balance. It's a common situation, I'd expect. In your case, though, I think it's unlikely you'd get finance in this manner for more than the new car's worth so you'll still need a unsecured loan to reduce the debt first. Talk to the finance guy at the dealer to find out what they will and won't do.
Of course it's still worth contemplating if you really can service the debt now and in the future. Add the fact that you're in a weak bargaining position for purchase price, waiting can probably save you a lot of cash over your lifetime.
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