Single mum, car on finance?

[Carquestion2729]

I’m currently considering financing a car and wondering if it fits my income and expenses. I’d appreciate any advice. I’m trying to manage my budget carefully, but I really need a reliable (used) car, as my current one is close to being written off. I also need a car for work.

I have an excellent credit score, and my bank has offered me a £7,500 loan at 6.6% APR, with monthly payments of £146 over five years.

My Current Financial Setup (Monthly)

Income:

About £3,000 from all sources (employment, overtime, child benefit, maintenance, etc.)

Outgoings: Total £2,025

Rent: £988
Food/Household Shopping: £450
Childcare: £100-£150
Current Car (Insurance/MOT/Tax/Petrol): £120
Credit Card Repayment: £100
Electric: £55
Phone and Internet: £35
Gas: £30
Insurance: £25
Pet Costs: £20
Apple Phone Insurance: £11.99
Spotify: £11.99
Apple iCloud Storage: £8.99
Netflix: £5
Calorie Counting App: £6
NOW TV: £4

I’m careful with money wherever possible. For example, I’ve paid off my phone, so I only have a SIM-only plan. My budget doesn’t currently include things like clothes or my child’s extracurricular activities, or fun things.

Also as I’m in training, I won’t pay council tax for the next 12 months.

Thanks in advance for any advice!

I raead that back and it sounded unintentionally harsh - I’m sorry, I didn’t mean to rain on your parade.

I pretty much have the same car dilemma as you at the moment and carefully worked out my budget. Or so I thought. Then I paid for an Emma subscription for a bit and it turned out my expenditure over a year was a lot higher than I calculated owing mostly to what I thought of as ‘one off’ or exceptional expenses.

And then my children’s other parent elected to stop paying maintenance for quite a long time. Which was annoying as he has a higher income and more family support.

anyhow, I hope you get your car! You sound like you’re careful and prudent and I’m sorry if my previous post sounded dire.

You said NOW TV is £4. I thought the cheapest was £6.99 a month? And there is the TV licence if you are watching the live channels or iPlayer.

But great planning - well done and I hope this works out for you.

You can always get a deal on Now TV, no need to pay full price. Just cancel and see what they offer.

But for the OP, you could probably cut a few of your costs.

If the calorie counting app is Nutracheck, you can half the cost by paying for a year at a time.

Phone insurance is expensive, is it really worth it? Can't you just buy a second hand phone if something happens to yours?

Why do you need cloud storage? If your free allowance is full, can you delete something. We're probably all storing huge amounts of 'digital clutter' so paying for this is a bit mad really.

Thanks for your message, really helpful - the loan has now been approved at the rate I was originally quoted. Only for the exact amount I am borrowing - £500 higher or lower and the rate went up to around 8% for some reason.

Good idea re adding other things to the budget. I usually have the unaccounted for money left in my main account, and I dip into it for any unexpected costs like for car maintenance and for birthdays/christmas etc. Fortunately I only have to use paid childcare in term time as my parents have DC during the school holidays.

We haven’t been on holiday in a couple of years but I am going to start a savings pot for that and one for Christmas/birthdays etc so things are allocated a bit more clearly

My energy costs I worked out from seeing my overall annual charge from last year, and dividing it by 12. I only have the heating on in January and February usually - I’m in a new build and it is very energy efficient, I’m also out of the flat from 6am to 9pm 3/4 days per week about half the time, that probably contributes to how low my bill is

Thanks again for your tips!

I went to cancel my Now tv and they offered me the lower rate for a few months 😀I also do not watch live TV or iplayer, so I don’t have a tv license.

thank you!

Yeah I’m not happy paying the phone costs - the iCloud storage I have to pay for 2TB as I have 100k photos on my phone. I’ve been decluttering them over the past few weeks - I had 120k to start off with, so hopefully when I get it down low enough I can downgrade to a cheaper storage plan.

I could possibly get rid of the insurance but it has come in quite handy so far - apple will replace my battery for free when it becomes less efficient, and I have already had to have a brand new phone from apple because I damaged my original one, for £25 excess. So I feel I’ve got my moneys worth! The area I live and work in also has very high rates of mobile phone theft, so even though my phone isn’t particularly new I’m still quite paranoid about that.

Also a PP mentioned checking if making extra payments will lower the monthly repayments or reduce the term. The loan terms and conditions allows me to do either - does anyone know which is preferable? Thanks!