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Original poster

Additional debt for a car

12 replies

Rv821 · 12/06/2021 22:53

Hi,

So we have a dilemna. We are currently in the middle of a major 'get debt free' journey after starting with around 60K of debt. We are making good progress and we have totally changed our spending habits. We have one issue. My car is literally about to die. it's 15 years old and is falling to pieces and starting to cost a lot.

A car is essential as I drive 2000 miles a month for work. I need a reliable car. Would it be terrible for me to borrow a small amount of additional money ( £6kish) to get a new reliable car?

The thought of new debt terrifies me, but a car really is essential for me. I know i could buy an old banger for a grand or less and if I only needed a local run around this is what I would do, however I drive so much I want something reliable.

What are your thoughts? Would it be wreckless to borrow more money to fund a car?

OP posts:
OatcakeCravings · 12/06/2021 23:02

Well if it’s essential to you for work reasons then it’s essential so you will have to fund it somehow, if you have no savings then you will either have to borrow money or lease a car through a company like Nationwide. Double check that your work don’t have any kind of scheme to buy/lease a car first, though these types have schemes have largely gone to the wayside these days (might have something to do with tax...)

There will be posters that will come on in a minute and explain that they have never spent more than 20p on a car and it has reliably driven 100000000 miles so far....but you never in real life meet anyone that gets reliability out of cheap cheap second hand car, they end up in the garage all the time.

CaribouCarafe · 12/06/2021 23:10

£6k seems a bit steep for a car, even if you need something reliable.

My current car felt extravagantly expensive to me (£3k) and has been very reliable - although I admittedly got a good deal for a 2012 Dacia Duster with 50000 miles.

I'd examine how much you really need to spend and assess what the minimum requirements are for the car you need. Otherwise it'll be tempting to overspend on a car that exceeds your minimum requirements and will end up prolonging your debt for no reason

Original poster
Rv821 · 13/06/2021 08:14

I think that I want something that I can keep for another 10 years - I had my old car from 3 years old but kept it for 10. I have been through my budget with a fine tooth comb and I know that I can afford it - it's just feels a bit weird taking on debt

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Whyareblokesonhere · 13/06/2021 08:43

I think as long as you stick to the premise of reliability then fair enough, once you start changing your spec for something you also like/don't mind being seen in then I think you are likely to take on unnecessary debt. Basically real choice over which car is a luxury you don't have, because previous choices/circumstances have led you to being in so much debt. In some ways having an horrendous car keeps you focused on getting out off the mess.

I say this as someone who was >£40k in debt and whilst now debt free I am still driving a £3k car and have been for the last three years as my finances haven't recovered enough to justify more spending on a car - despite it being the subject of many jokes from work peers, who all have high end vehicles.

I highly recommend looking at Kia, if you are patient you can probably find one 5or 6 years old and so still with 1or2 years warranty left on it.

NoSquirrels · 13/06/2021 11:33

If you really drive 2,000 miles a month for work - a 90-mile round trip commute? - then yes, you should have as reliable a car as you can reasonable afford and if that is £6,000 I think you should do it. Trying to do it more cheaply isn’t just the extra breakdown/repair costs but also fuel economy, road tax etc based on emissions. Your car and commute is presumably a massive chunk of your monthly outgoings and if you’re commuting that distance I’m going to assume you can’t avoid it/get similarly paid work closer so yes, you need to prioritise your car in a different way to someone just using a car for leisure or with a different back-up plan for transport.

Dearsister · 13/06/2021 11:36

I'm one of those 20p posters...well not really, but we've just spent £1000 on my latest car and it was plenty. You will know what you're looking for though, so if it's planned for then it's fair enough.

Polkadotties · 13/06/2021 11:40

I’m probably a minority but I don’t class things as mortgage, loan/pcp for a car as debt. To me debt is what you run up on credit cards when you can’t afford it out of your monthly wage.
If you can comfortably afford the repayments on £6k and you need the car for work then I don’t see what the issue is.

filka · 13/06/2021 11:52

Think of it a bit differently - that you are trading off a high maintenance cost (allowable out of your budget as it isn't debt) for a similar amount of money that you choose to tag as debt. i.e. you are actively managing your budget, which is probably more important than debt/non-debt.

But I wonder if you need to spend £6k - for various reasons there are old but low mileage cars out there, you just have to find them.

BarbaraofSeville · 13/06/2021 13:26

Can you borrow money at a decent interest rate? You can get some really cheap loans, so would be ok to buy a car if it's cheap to run and you're the type of person who keeps their car a long time.

But if you have a bad credit rating and loans would be expensive, it might be better to minimise your debt repayments for a month or two so you can scrape together a grand or two to buy a cheaper one outright, so your £6k car isn't more like a £10k one once interest has been factored in.

Elieza · 13/06/2021 13:58

I bought a £3000 fancy but oldish car and it died within a year. I then bought a newer small car for £5k and my plan is to run it into the ground. It’s now ten and apart from needing a new battery before winter it is a great runner with a small engine and cheap to insure.

If I had to choose again I’d buy the newer better car as the £3k German fancy car was false economy.

Original poster
Rv821 · 13/06/2021 14:01

@NoSquirrels

If you really drive 2,000 miles a month for work - a 90-mile round trip commute? - then yes, you should have as reliable a car as you can reasonable afford and if that is £6,000 I think you should do it. Trying to do it more cheaply isn’t just the extra breakdown/repair costs but also fuel economy, road tax etc based on emissions. Your car and commute is presumably a massive chunk of your monthly outgoings and if you’re commuting that distance I’m going to assume you can’t avoid it/get similarly paid work closer so yes, you need to prioritise your car in a different way to someone just using a car for leisure or with a different back-up plan for transport.
Hi, Yes I really do. In fact it's a little more than 2000. It's a 100 mile round trip to work each day and then probable another 40 or 50 miles a week due to evening/weekend short trips to kids activities etc.
OP posts:
Original poster
Rv821 · 13/06/2021 14:03

@BarbaraofSeville

Can you borrow money at a decent interest rate? You can get some really cheap loans, so would be ok to buy a car if it's cheap to run and you're the type of person who keeps their car a long time.

But if you have a bad credit rating and loans would be expensive, it might be better to minimise your debt repayments for a month or two so you can scrape together a grand or two to buy a cheaper one outright, so your £6k car isn't more like a £10k one once interest has been factored in.

I seem to be able to get a fairly standard interest rate based on quotes that I have had - around the 7% mark
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