Quick general finance question
Discussion
Hello, not sure if this tends to vary a lot depending on the garage you purchase from, but just got a couple of questions regarding financing a car.
I'd ideally like to spend £6500 on a car and I have about £4500 to put down as a deposit.
Do they tend to have a minimum amount you can finance? For example I'd be looking to finance £2000, is this enough or do they have a minimum on this?
Also say you took finance out over 12 months paying £190 a month, could you make lump overpayments on this when you have some spare cash? For example if you suddenly find you have £400 spare, could you pay that amount off in a lump sum, therefore reducing monthly payments?
One final question, is there a final "option to buy" payment at the end, or is this only with certain types of finance? Always thought once your monthly payments were up, that was it, but on one garage website I saw a £199 option to buy payment at the end.
Many thanks
I'd ideally like to spend £6500 on a car and I have about £4500 to put down as a deposit.
Do they tend to have a minimum amount you can finance? For example I'd be looking to finance £2000, is this enough or do they have a minimum on this?
Also say you took finance out over 12 months paying £190 a month, could you make lump overpayments on this when you have some spare cash? For example if you suddenly find you have £400 spare, could you pay that amount off in a lump sum, therefore reducing monthly payments?
One final question, is there a final "option to buy" payment at the end, or is this only with certain types of finance? Always thought once your monthly payments were up, that was it, but on one garage website I saw a £199 option to buy payment at the end.
Many thanks
If you've got good credit, there are plenty of plastic options out there at the moment offering 0% on purchases over 15-24 months.
£2k shouldn't be a problem - make payments on it every month, larger ones if preferred with no penalty, and if you get to the end of the term without paying it off you can always balance transfer it.
£2k shouldn't be a problem - make payments on it every month, larger ones if preferred with no penalty, and if you get to the end of the term without paying it off you can always balance transfer it.
I do finance for some of my customer.
Financing £2,000 on a £6,500 purchase should be fine. You usually cannot make over payments on finance deals. You would need to pay off the whole deal to clear it.
It sounds like you want a straight forward hire purchase agreement, not something with a final payment.
Financing £2,000 on a £6,500 purchase should be fine. You usually cannot make over payments on finance deals. You would need to pay off the whole deal to clear it.
It sounds like you want a straight forward hire purchase agreement, not something with a final payment.
You don't need to get the loan from your own bank. Have a look on Compare the Market and Money Supermarket - plenty of cheap loan deals around.
Or, as above, a 0% credit card that you can pay off in installments.
I can't see the sense in getting into a car finance arrangement in your situation.
Or, as above, a 0% credit card that you can pay off in installments.
I can't see the sense in getting into a car finance arrangement in your situation.
Found a 9% loan online over two years, £90 a month.... says there is no early repayment fee.
Are you allowed to call up and pay off a bit extra in an additional lump sum every couple of months or so? The odd extra hundred when you have it spare?
Or are you only allowed to pay either your agreed monthly payment OR the whole lot off in one go?
Thanks
Are you allowed to call up and pay off a bit extra in an additional lump sum every couple of months or so? The odd extra hundred when you have it spare?
Or are you only allowed to pay either your agreed monthly payment OR the whole lot off in one go?
Thanks
Louisa911 said:
Are you allowed to call up and pay off a bit extra in an additional lump sum every couple of months or so? The odd extra hundred when you have it spare?
Or are you only allowed to pay either your agreed monthly payment OR the whole lot off in one go?
You'll need to check the details of the loan to find the answer to that one.Or are you only allowed to pay either your agreed monthly payment OR the whole lot off in one go?
9% looks high.
Have you explored the 0% credit card route?
Gruber said:
You'll need to check the details of the loan to find the answer to that one.
9% looks high.
Have you explored the 0% credit card route?
9% is high unless you have no credit history, then its fairly normal. Loans also have higher APRs for lower amounts. 9% looks high.
Have you explored the 0% credit card route?
OP You could try ZOPA (don't know if you'll fit their profile) where rates are lowish and you can pay early with no penatly or as suggested the best way to borrow a small amount over a fixed period is a 0% or low introductory rate credit card where you really do have the flexibility to pay the minimum payment or the full balance.
One thing with bank loans - it's worth investigating what APR's they use for different amounts. Sometimes a larger loan will have a lower APR than a smaller value loan, and the difference in interest amounts makes the interest cost of the larger loan less than the smaller loan (and you can bank the extra money to earn some interest in the mean-time too).
Your home may be at risk etc etc.
Your home may be at risk etc etc.
To be honest in your situation I'd opt for a 0% credit card, it'll give you flexibility to pay off lump sums, lower payments if your short (as long as they're above minimum payment) and most importantly no interest. You may get charged around 1.5% by the dealer though to cover his costs for processing.
9% is far too high. If that's what you get as a personal loan, i would be interested to see what a car finance loan rate will be for you.
Why do you want to spend 6500 on a car, is there a car specifically that you have seen for this amount?
I would take your 4500 to an auction and you will get not far off as much as you would get from a dealer for a thousand more.
0% Credit card also works, however as someone else said, if you can get the whole thing on 0% there is no point in spending your own money when you can spend someone else's for free. Stick your money in an ISA, pay min payments for the 0% period and then pay the balance off at the end.
Why do you want to spend 6500 on a car, is there a car specifically that you have seen for this amount?
I would take your 4500 to an auction and you will get not far off as much as you would get from a dealer for a thousand more.
0% Credit card also works, however as someone else said, if you can get the whole thing on 0% there is no point in spending your own money when you can spend someone else's for free. Stick your money in an ISA, pay min payments for the 0% period and then pay the balance off at the end.
Louisa911 said:
Are you allowed to call up and pay off a bit extra in an additional lump sum every couple of months or so? The odd extra hundred when you have it spare?
Or are you only allowed to pay either your agreed monthly payment OR the whole lot off in one go?
Thanks
Ignore the advice that you cannot make over payments, pure b
ks when talking about unsecured credit. Louisa911 said:
Found a 9% loan online over two years, £90 a month.... says there is no early repayment fee.
Are you allowed to call up and pay off a bit extra in an additional lump sum every couple of months or so? The odd extra hundred when you have it spare?
Or are you only allowed to pay either your agreed monthly payment OR the whole lot off in one go?
Thanks
Notice how they say there is no 'fee'. Are you allowed to call up and pay off a bit extra in an additional lump sum every couple of months or so? The odd extra hundred when you have it spare?
Or are you only allowed to pay either your agreed monthly payment OR the whole lot off in one go?
Thanks
Just check that if you decide to redeem early, you might have to to cover the interest owed over the entire term as part of the settlement..
Not sure, not a finance expert, but it's a question I'd ask.
9% was just what money supermarket were coming up with. Zopa offer me 5% which means over two years i'll pay 2230 or so back on a 2000 loan. Seems good enough to me. They also allow one-off payments of a lump sum to pay off whenever you like and no early repayment fee. Does that sound about right?
Hi, Lots of people have mentioned the 0% credit card thing. If you can afford to pay more, and get a loan, that's great. People are trying to suggest the BEST i.e. cheapest way for you to borrow the 2K.
Then you can spend the money you save on shoes and handbags or knives and guns or petrol/diesel - trying not to stereotype here.
With a 0% purchases card you can pay off as much or as little (above a minimum - probably about 60 quid))as you like each month and you will pay NOTHING in interest for the offer period.
Set up a minimum amount direct debit and then pay bits off extra as and when you can afford, and put a note on the calendar to pay the rest off a couple of months before the deal ends.
That's better than 5% from ZOPA, better than 9% from moneysupermarket, the only things you might have to pay is a credit card fee up to 2% by the company selling you the car, because they will be charged by the credit card company. (that's how the credit card company can afford to give you the 0% deal, because they get about 3% commission on all sales on all purchases on the card)
Please investigate this 0% credit card thing as your priority. If you can do it, it is the cheapest way of doing it, and it will also improve your credit score if you pay it off early/within the timeframe, giving you access to better mortgages, loans in the future, if that's what you might be needing.
Then you can spend the money you save on shoes and handbags or knives and guns or petrol/diesel - trying not to stereotype here.
With a 0% purchases card you can pay off as much or as little (above a minimum - probably about 60 quid))as you like each month and you will pay NOTHING in interest for the offer period.
Set up a minimum amount direct debit and then pay bits off extra as and when you can afford, and put a note on the calendar to pay the rest off a couple of months before the deal ends.
That's better than 5% from ZOPA, better than 9% from moneysupermarket, the only things you might have to pay is a credit card fee up to 2% by the company selling you the car, because they will be charged by the credit card company. (that's how the credit card company can afford to give you the 0% deal, because they get about 3% commission on all sales on all purchases on the card)
Please investigate this 0% credit card thing as your priority. If you can do it, it is the cheapest way of doing it, and it will also improve your credit score if you pay it off early/within the timeframe, giving you access to better mortgages, loans in the future, if that's what you might be needing.
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