To pay so much for a car on finance?

[CaulkheadUpNorth]

I've been quoted for a finance deal which includes two years warranty, three years service and mot. It's a two year old car, with 21,000 miles.

The amount I've been quoted is high due to having defaulted on two accounts four years ago. It stays on credit report for six years.

The amount I've been quoted is nearly 20% of my post-tax income. If I take away all my rent/bills etc it would be a third of my disposable income.

Aibu to get the car? My job changed in May and I'm really struggling without a car. It's possible, but hard and disadvantages other people.

[EleanorHandbasket]

Hmm.

Why did you default four years ago? What's changed now?

Is there any reason why you can't buy a cheap car for the next two years and then go for 0% finance or cheap finance when your credit is repaired?

Otherwise you risk defaulting on this one too.

I've done the debt cycle and it's ridiculous. We paid off nearly 45k a few months back and I will NEVER get back in even a little bit of credit card debt, it's insidious and dangerous.

[gamerchick]

Does it have to be a newer car? Would one a bit older be cheaper?

[CaulkheadUpNorth]

I was in my overdraft of my student account and went to America for the summer. During then I had lots of letters saying if I didn't pay into the account I would be breaking terms of conditions as had graduated. I didn't know, didn't pay anything in and by the time I returned it was closed and had been handed to a credit company.

[CaulkheadUpNorth]

I can't afford to pay out for a used car (ie £1000+) in one go. I can save over the next year, but would be stuck if it needed repairs or anything. It also wouldn't help with the current job to wait that long.

[doughballdoughballdoughball]

20 per cent of your take home seems a huge amount to finance a car. What if you lose your job, hours reduce etc, etc

Also at a high rate of interest, for ages they'll be a massive gap between the value of the car and had much you'll have to repay. You'd have to pay even more for gap insurance or get stuck with debt and no car if it were to be written off.

Could you get a cheaper car in the short term, then when your credit scores better get one of the better deals that are available?

[bettybyebye]

What's the cash price of the car? And what are the details of the finance offer? Any chance you would be accepted for a 0% credit card which you could use to buy a cheaper car? That's how we've always bought cars as we like to have the freedom to pay off the cars as quickly as we can, but can pay less on tight months. We tend to buy second hand cars that are about 4 years old, which works for us. MSE website has a virtual credit card application tool which tells you what cards you are likely to be accepted for so you don't ruin your credit rating by applying for loads

[Fairylea]

Could you buy a cheaper card on a 0% credit card instead?

[purits]

Don't be a numpty. This is a classic case of someone with debt problems getting themselves into even more of a mess. How long is this deal for - at least three years? Do you really want to tie yourself into an extortionate deal for that long.

Can anyone give you a temporary loan or sub - parents, employer?

[Fairylea]

(Cards like virgin let you transfer money to a current account for a small fee on 0% interest so you could even buy privately).

[hellsbellsmelons]

That sounds like a lot of money.
Can you get a loan from a bank and get a much cheaper car that way?
As long as the car is taxed and MOT'd it can be cheap as chips.
Best way to motor according to my dad!

[heraldgerald]

Any way of doing it cheaper,? I see the advantages but that's a lot.

[doughballdoughballdoughball]

I sympathise with the situation you're in.

Don't assume older cars are not necessarily less reliable or more expensive to run. I drove a 15 year old corsa for years, it passed it's mot first time every time, barely cost a penny in maintenance.

During the same period my husband was driving a 2 year old car that was always breaking down, and the faults were always excluded by the tiny writing on the warranty documents. That car was a very expensive mistake and lost thousands more when we came to trade it in

[everyusernameiwantistaken]

What brand of car is it? Some cars (Hyundai, Kia etc) have long warranty periods anyway so it's not necessarily an "extra" having this included as these would be included if you bought the car elsewhere too. The MOT after 3 years is only about 35 and most expensive things would be covered by the long warranty so you're only really getting the services for free.

Obviously ignore that if it's a car with bog standard 3 year warranty from new!

[CaulkheadUpNorth]

It's a Citroen. For sale at £6950, and I would end up paying £9000 through the finance. It's got one year of warrantee left, so the extra two would be from when that ends.

I've looked at the credit card option but declined (I'm guessing on the same thing as the lower finance).

[glasgowstevenagain]

9000.

how much would taxis cost for the length of the finance period.

Oh add in road tax insurance mot and petrol.

5k a year it will cost you

[AgaPanthers]

£6950? That's a ludicrous amount to pay for a car. If you must buy credit, buy something costing £2k, max.

The Citroen will be worth £2k in 2 years anyway.

YABVU

[LightastheBreeze]

How near is the job, could you cycle for the time being as its the summer and save hard for a cheap car.

[AgaPanthers]

Also, if it's a 3 year loan, then you are paying £250/month, out of £1250/month income. That seems very high, and then petrol, etc. on on top of that.

Plus let's be honest if you really can afford the loan at £250/month, then if you saved the money for a couple of months you could buy a car anyway. (£500).

[gamerchick]

But surely you can get cheaper cars on finance?

[AgaPanthers]

of course you can, I remember when I bought my first car, £1k in cash, they had a Black Horse loan (expensive loans from Lloyds for people with bad credit) stand up. No need to pay £7k whatsoever.

[ComposHat]

Seems like you are saddling yourself with a huge financial commitment that could easily cripple you should your circumstances alter. Have you factored in the high cost of insurance for young drivers without ncd too? That could easily add a grand each year.

Have you thought about a moped? Cheap to buy, cheap to run, cheap to insure and if you only need it to get too and from work, ideal for dodging the streams of traffic.

[ENormaSnob]

Yabu

And be very wary of citroen and their warranties.

They are shit.

[Pobblewhohasnotoes]

You really don't need to pay £7k on a car.

[minibmw2010]

You need to be more realistic and look for a car around the £3K/4k mark, so it won't be as new, maybe not look as nice, etc. but it'll work fine and get you from A-B. Don't get into more debt.

[Joysmum]

One thing to bare in mind, which many don't, is gap insurance.

The amount of your loan will not be cover by car insurance. If your car gets written off, you will still be left paying the loan.

Personally, I think you're bonkers to be considering spending such a huge proportion of your income on a car!