What kind of loan is it called?

[SimonD]

Hi

Just looking at financing options for getting myself into something a little smarter and with better MPG than the current steer. What kind of loan is it called where you can defer part of the repayment to the end of the loan (much like M&S car loan here: http://money.marksandspencer.com/loans/car-buying-... )

Just interested as it makes a more realistic financing option. Also, does anyone know who does the best rates on these?

Thanks,

Simon

[Jasandjules]

Do you mean HP with a balloon payment?

[SimonD]

Kind of like that, but where the loan isn't attached to the car at all, so I could buy a car second hand, for example, worth £8k, predict it'll be worth £4k in 3 years, so get an £8k loan with £4k deffered. You pay interest on the whole lot but only repayments on the £4k. However, it seems very much geared to buying any second hand car (including buying privately) unlike HP, which you have to go to 'trade' to find a car with...

[FarleyRusk]

My tip would be to save and buy the car the old-fashioned way once you've got enough int he bank. Afterall we're not out of the crisis yet. But then again I'm an old git so i would say that...

[SimonD]

Like HP mostly, but I wouldn't be able to HP a car in the classifieds. I think it's just called a 'defered loan'.

A bit more meat on the story - I run a 7 year old Mondeo and in my (relatively) new job my car allowance has just kicked in. I get a reasonable allowance and need to get a 'smarter' car, but obviously am not in a position to pony up a large amount up front for a car. Yes, I get the 'save up and buy it' school of thought but that doesn't really work for car allowances and the like. I can't keep running an older car with ever developing faults and poor (relative) mpg to client sites, taking them out to lunch etc.

Anyway, it seems you 'can' get these deferred loans. Finding the best one, I feel, is going to be the challenge...

Simon

[Vee]

OP
I use this as it is cheaper than the PCP offered by dealers and you can't get PCP on a private purchase.
It's just a personal loan with different payment plan instead of fixed monthly paying it all off over 3/4/5 years.
It is not secured against the car.

Alliance and Leicester used to do one, only M&S did one a year ago when I took mine out.

Edited by Vee on Tuesday 17th August 11:37

[SimonD]

Thanks for the replies guys. Looks like it'll be the best option for me at the mo (only looking to borrow 7.5k over 3 years, with about half deferred).

[Corsair7]

FarleyRusk said:

My tip would be to save and buy the car the old-fashioned way once you've got enough int he bank. Afterall we're not out of the crisis yet. But then again I'm an old git so i would say that...

Well, if your looking at protecting yourself, it would be better to take out HP on a car, then if it all goes wrong, as long as you've paid off more than half the loan, you can simply hand back the car if you cant make the payments through losing job etc.. Just 'walk away'....

Better than 'investing' all your hard earned money in a depreciating asset that you might have to sell dirt cheap in a terrible market if you lose your job and cant afford to keep/run.

PH gonna love this. I know, I'll burn in hell....