Car Finance Vs Loan

[WinstonChurchill]

So my car has broken down....again. I own it outright, it's a 10plate and is probably worth around £1800/2k. I wanted to replace it next January as I've started a new job and wanted to feel more secure before I forked out....but my bloody car had other ideas. We're seeing whether the car can be fixed tonight cheaply (I have a real issue with putting money into a car that it is simply that old) to get it through to January. However if it doesn't work out, I then need to decide whether to buy a car using finance or get a personal loan. I have a good credit rating score (or at least I did when I last checked), I do have debt (which I was hoping to have cleared by Jan18), but I'm looking for advice. Which would be the better option??

Personal loan on as short a term as possible.

Try to avoid going up in car too much. Get something at say £2-3k. Enough to get you to/from work. Pay off the loan as fast as possible, then put that same amount each month towards getting a better car.

Once working, how quickly can you repay a loan of say £3k? 10 months, less?

Fairly quick if I put my mind to it. Thing is that this is the main car (we have two) and I don't want to just get another oldish car that is just a likely to have issues

Can you tighten budget now so that you keep on plan to repay existing debts plus build up a fund to go towards a new (second hand) car?
The more of a deposit you have the better, so you might say pay 20% of value and have 80% of value as a personal loan, which you repay within a year.

Ask existing lenders about what personal loan rate you could get, as an existing customer with a good track history of repayment. You may find the rate is low. Some lenders will ask what the money is for but may not add any extra conditions (such as maximum mileage) as it isn't a loan secured on the car itself.

Try to get out of the mindset of what you want to get... it's what you can afford to get.

Your current car is 7 years old, it may have been playing up a while but may have been mostly fine for many years.

You won't want another 7 year old car but a 5 year old one maybe fine, at least for a year or so, then you could trade up to say a 3 year old car and pay cash (debit card).

It sounds as though you have been working at paying off debt so you don't really want to take a huge loan. You need a car that gets you from A to B without falling apart.

You're right @nannynick, I'm currently paying off a credit card debt that I had prior to starting this new job. I knew that getting another car would have to be on the cards, but I was hoping that my current car would be able to make it through the year to allow me to clear by this debt down before taking on a substantial car finance, regardless of whether it was a personal loan or not. I genuinely do have the best intentions and well laid plans, but if the car can't be fixed tonight then I feel it's all going to go out the window which is just depressing

If the fix is more than the car is worth you sell the car and get as small a loan as possible to get you something that will get you to/from work.

You say it is the main car, what do you mean by that? If the other car is more reliable then that now the main car, the second car is mostly for transport to/from work.

Car debt is the next big financial bubble - the leasing industry is under investigation and consumer debt under leases has increased a lot over recent years. DO NOT LEASE A CAR.

You are actively trying to pay off existing debt, you have been filling the hole as fast as you can so you can climb out. You don't want to be digging that hole at a faster rate than you are filling it.

At least you have not said that you will go out and get a brand new car! At least you are thinking about the cost and about the options. Continue to investigate the options, is fixing the existing car possible? Is selling it possible? Is getting a small loan possible that you repay quickly? Are other transport options available? How much would a reasonable car cost, how mic loan would you need? What would the insurance be - could it be a small car with low insurance, low road tax? Keep researching the options - information is Queen.

Do some research and buy a £500 eBay job with a years m o t. Car finance is pissing money away . you've got debt and can't afford smart cars.

7 years is a new car to many, you have a lemon but they can be avoided.

Update! It looks like it's going to be a couple of hundred to fix so we'll fix and I'll keep working towards Jan 18 and the debt.
Thanks for the advice all

Perhaps ease off on the debt repayment a tiny bit and start a car sinking fund, so you have money for the next time something goes wrong or to put towards a replacement car.