Buying on finance - a few questions
Discussion
Hi.
We're getting a 2nd car and will use finance. Our spending cash is annoyingly tied-up for a few months.
Budget - £9k which equates to £210 pcm (absolute tops). Deposit £up to £900
We've found a couple of decent cars and want a soft search before we embark on test drives.
Our credit score is very good and we are about to mortgage our home so don't want hard searches.
A couple of places want us to us their platform, mycarfinance 24/7 and Zuto. Their % is chunky at around 12% but they seem to offer additional security of purchase with distance selling - we've seen a couple of cars >100 miles from home which suit us. It seems easy BUT expensive.
Can we get an independent broker who will soft search and effectively give us a line of credit to use wherever, including private deals I might add?
I'd prefer this as it opens up many options.
We were going to get a motability car but the wait for a new car is >6 months for what we want.
As always, thanks in advance.
We're getting a 2nd car and will use finance. Our spending cash is annoyingly tied-up for a few months.
Budget - £9k which equates to £210 pcm (absolute tops). Deposit £up to £900
We've found a couple of decent cars and want a soft search before we embark on test drives.
Our credit score is very good and we are about to mortgage our home so don't want hard searches.
A couple of places want us to us their platform, mycarfinance 24/7 and Zuto. Their % is chunky at around 12% but they seem to offer additional security of purchase with distance selling - we've seen a couple of cars >100 miles from home which suit us. It seems easy BUT expensive.
Can we get an independent broker who will soft search and effectively give us a line of credit to use wherever, including private deals I might add?
I'd prefer this as it opens up many options.
We were going to get a motability car but the wait for a new car is >6 months for what we want.
As always, thanks in advance.
Unless you're cutting it fine with your mortgage affordability then I wouldn't be worried about the credit checks, personally.
Having said that you can't delay the car purchase then your options seem to be very simple:
1) You buy something outright, maybe with a 0% credit card and pay off over the coming months if you've only got £900 to spare currently. Something like a £3k runaround with a fresh MOT. You can then explore part-ex for an upgrade once the mortgage is settled.
2) You find a suitable vehicle and sort the finance, knowing that it will show up on your mortgage application but that you're well within your affordability checks - I believe stress testing for most mortgage lending is currently up to about 6% interest rates but I don't have definitive proof of that.
3) You look at 'in stock' lease deals which would suit your needs - The benefit here is that it's the value of the lease which sits against your credit file, rather than the full value of the deal. So a £10k lease of a Ford Focus over 3 years would show, rather than a £25k PCP (Even if the monthly cost was lower and you had the 'optional final payment' of £20k)
Having said that you can't delay the car purchase then your options seem to be very simple:
1) You buy something outright, maybe with a 0% credit card and pay off over the coming months if you've only got £900 to spare currently. Something like a £3k runaround with a fresh MOT. You can then explore part-ex for an upgrade once the mortgage is settled.
2) You find a suitable vehicle and sort the finance, knowing that it will show up on your mortgage application but that you're well within your affordability checks - I believe stress testing for most mortgage lending is currently up to about 6% interest rates but I don't have definitive proof of that.
3) You look at 'in stock' lease deals which would suit your needs - The benefit here is that it's the value of the lease which sits against your credit file, rather than the full value of the deal. So a £10k lease of a Ford Focus over 3 years would show, rather than a £25k PCP (Even if the monthly cost was lower and you had the 'optional final payment' of £20k)
sunnyb13 said:
Sorry to say this is probably the stupidest thing to do when going for lending.
Speak to a mortgage broker before applying for any credit/finance for a car. It will severely affect your ability to borrow/ the size of mortgage available.
Speak to a mortgage broker before applying for any credit/finance for a car. It will severely affect your ability to borrow/ the size of mortgage available.
Mineral1 said:
Agree with the above, id really avoid lending now because your mortgage offer will be based on your lending and affordability profile at the time you applied.
I have to disagree. If OP is planning on doing the car borrowing regardless, it's better that it's factored in to their mortgage borrowing. So many people seem to try work the system to maximise what they can borrow, then people wonder why they're suddenly unable to make repayments when the interest rates rise. I definitely agree about speaking with a broker, but I seem to recall the last time I renewed my mortgage I was asked about whether or not I anticipated any changes to my outgoings - You know, like a potential car loan I was planning to take that would reduce my monthly disposable income.
J1990 said:
I have to disagree. If OP is planning on doing the car borrowing regardless, it's better that it's factored in to their mortgage borrowing. So many people seem to try work the system to maximise what they can borrow, then people wonder why they're suddenly unable to make repayments when the interest rates rise.
I definitely agree about speaking with a broker, but I seem to recall the last time I renewed my mortgage I was asked about whether or not I anticipated any changes to my outgoings - You know, like a potential car loan I was planning to take that would reduce my monthly disposable income.
I'd like to think they'd have worked that out already rather than relying on a mortgage offer being withdrawn and a house purchase falling through.I definitely agree about speaking with a broker, but I seem to recall the last time I renewed my mortgage I was asked about whether or not I anticipated any changes to my outgoings - You know, like a potential car loan I was planning to take that would reduce my monthly disposable income.
sunnyb13 said:
Sorry to say this is probably the stupidest thing to do when going for lending.
Speak to a mortgage broker before applying for any credit/finance for a car. It will severely affect your ability to borrow/ the size of mortgage available.
We've spoke to our broker and I know my way around this as well. Speak to a mortgage broker before applying for any credit/finance for a car. It will severely affect your ability to borrow/ the size of mortgage available.
It's fine as we have all the spare income we need to cover the amount we need to borrow.
The question is around the finance and how to get a better deal. I tried the Money Supermarket idea and didn't get much luck.
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