LukeyB

iTrader: (1)

Hi, I was wondering if anyone could shed light on this for me. I've wanted a Subaru for years and I finally earn enough to be able to afford one, I've been in my current job for just over a year and i just got a raise so decided its time i stopped wishing and went ahead and got a scooby. I already have saved enough for insurance, tax and part of the cost of the car but I was looking at loaning around £7500 for 3 years as this would give me affordable re-payments and not induce too much interest. I have a very good credit score but have never taken a loan out before. The cheapest I've been able to find a loan for is on Zopa but it would be at 12.66% equating to over £1400 interest, £790 of which is borrowing fee..
This seems a little steep to me considering that my credit rating / income / outgoings all make this a affordable loan.
Has anyone had any similar problems getting a loan and figured out a better way or will i just have to face the high interest rate or wait a couple years to save up money.

pflowers

Just buy what you can with the money you have saved and forget the loan.

LukeyB

iTrader: (1)

unfortunately that would mean settling for a classic wrx where as i have my heart set on a widetrack blob. Plus i would actually like to take out a loan (relevant to not being stung with high rates) to improve my credit history and help secure a decent mortgage in a few years time.

silverfox72

iTrader: (7)

Give Sainsbury's loans a try - they have some good deals.

Gear Head

iTrader: (2)

That does sound very expensive. I got 4.9% on a car loan recently.

Have you actually checked your credit score with the likes of Equifax of Experian?

Also, if you haven't had any many credit cards in the past or don't have many contract agreements such as a mobile phone, this will go against you believe it or not.

Also, make sure that you are registered for voting at your current address. Most lenders prefer that you have been registered at said address for at least 2 years or more.

Gear Head

iTrader: (2)

Please note that these cars are not cheap to run by any means. On top of your loan, I'd want to set aside another £100-£150 a month for servicing and maintenance. If this is a stretch, then settle for a cheaper car. No point stretching yourself as you will quickly grow to recent the car.

Graz

6.3% on £7500 according to this. Strangely borrow £7501 and you'll get 4.6% so I'd do that. http://www.moneysavingexpert.com/loa...personal-loans

Also assuming the car is coming from a dealership they may be able to give you a good deal though beware dealers that quote flat rate interest, the APR is the number to compare against personal loans, the flat rate figure is quite a bit lower.

Another option is to get a 0% credit card deal though you may need to take out several as they don't always offer big credit limits.

And as mentioned what is your actual credit history like? Do you have a mortgage, credit cards, etc.? You only get a decent credit score if you have a record of borrowing money in the first place. Sounds odd but lenders like to have seen that you've borrowed money and paid it back. If not get a starter credit card, spend on it and pay it back each month (set up a direct debit to pay the balance in full.).

Bean592

Try your bank, they usually do fair rates and I know before Xmas natwest were doing an offer on 7.5k loan where ther payments were the same as on a 5k loan (or marginally higher dependant on the term)

Widetrack blob best way to go (biased I might add) what you got to buy one?

Jazzy Jefferson

iTrader: (2)

God forbid you should just buy something you can afford...
Don't get a car on a loan, its a stupid idea.

LukeyB

iTrader: (1)

I've already considered the running costs and servicing + planned modifications, I'm within walking distance of work so i will only be using the scooby for my own enjoyment (no business miles). I've got a mobile contract plus the usual, rent, council tax, gas, electric, sky, internet.
I checked my credit score late last year with credit expert and although i cant remember the actual score it was the high end of "good" just a few points shy of "excellent" :-D

Think the problem may lie in my age and lack of any lending history.

Jazzy Jefferson

iTrader: (2)

No, the problem is you think by taking on more debt, you improve your chances of a mortgage.

quattroowner

iTrader: (5)

I have been looking into this as well.

Try to avouid finance companys. As they checked my credit file ( for what i though was 1 company) No i hade 14 checks from different companies and it brought my rating down to 750 - 800 odd points on experian, , try your bank mate usually the best way to go. Especially if you been with them for a few year's.

LukeyB

iTrader: (1)

I set myself a budget of 9k for a new car. There's a 90% id be buying private as it seems the nicest scoobies are from private sellers. I can afford the repayments no problem and i understand the "buy what you can afford" but unfortunately i dont have 10k saved up, my current car sitting at 104k miles so im over due a new car anyway plus i've been obsessed with getting an sti for years now and i cant be assed saving money for 2 years so i can buy it outright.

LukeyB

iTrader: (1)

I think you misunderstood me, mortgage companies like to see that you have a history of repaying dept on time (I have been careful with money and have never had dept before) so surely taking a out a car loan and repaying it before buying a house will boost my chances of getting a more competitive mortgage rate.

Bean592

^^^^^^^
As said here be carful getting too many "quotes" for loans as everytime you have a credit check an don't take the loan it lowers you overall credit score. Two options you have dependent on the size of the loan you want:
1) your bank will be your best option if you've not had a loan or finance before as they know you best ( as long as you haven't been over your overdraft loads or missed payments you should be fine) or
2) if it's only a small loan circa 3-3.5k get an interest free credit card/s most do up to 2 yeas interest free on purchases ( limits you to a dealer as cash withdrawals don't come under this)

9k should get you a decent low mileage widetrack blob, like others gave said just be prepared for the expense that goes with these on top omf the tax and insurance

Oh and remember the tax difference in the ore 23/3/2006 ones as it jumps from £280 per year to £490

Jon

LukeyB

iTrader: (1)

To all that have replied, can I ask a couple questions.
How old were you when you got your first scooby?
How did you afford it?

One of the reasons im wanting one so bad now is I'm worried in a few years time once i could save up plenty cash, low millage decent blob eyes are going to be very hard to find.

fpan

iTrader: (11)

+1000

Bean592

Well this is my first scooby, had a few other performance cars before this though, 106 GTi, Astra GSi Turbo, Celica 190 so that helped on the insurance side of things. As for age I'm at the grand "old" age of 30 which helps too. I afforded it by selling my old car using my savings and a small loan through my bank

Hope you sort something out a they are awesome machines and like you say goo low mileage example are getting harder to find

Bean592

I can slight understand what is being said here as a loan for something that is only really going to decrease in value is never good but how many people have 8-10k "lying around" to buy a car with

I'd say I'm a sensable chap when it comes to money and as long as you know you can afford the repayments and a little extra just in case anything goes we on go for it you only live once!

Just don't base the whole loan mortgage thing in the same bracket as that defeats the object be sensable and know what you can afford an you'll be fine

Jazzy Jefferson

iTrader: (2)

If you think that's all they base it on, then sure! But its not is it?

If you want to improve your credit, there are better (and cheaper) ways then taking out a loan.

Bean592

I can slight understand what is being said here as a loan for something that is only really going to decrease in value is never good but how many people have 8-10k "lying around" to buy a car with I'd say I'm a sensable chap when it comes to money and as long as you know you can afford the repayments and a little extra just in case anything goes wrong, go for it you only live once! Just don't base the whole loan mortgage thing in the same bracket as that defeats the object be sensable and know what you can afford an you'll be fine

salsa-king

then no one would ever ever buy a new car unless your name is Donald Trump etc.

Graz

As I'm a bit older than some on here (nearly 42) I won't base my response on buying my one and only Scoob. At the ripe old age of 24 I had my first "performance" car, an E30 325i BMW coupe. It cost £6k which I guess would equate to what you're spending in today's money on a Scoob, my Dad lent me the money for it as I could give him a better interest rate that the building society and it was lower than borrowing from the bank. I could afford it and I knew my wages were only going to go up as the years went on as I got promoted from a graduate role to more senior positions. Still was quite hard on the pocket, especially the bill to get the exhaust manifold studs replaced in the head and skimmed.

To those who've posted "don't buy it until you can pay cash" I tend to disagree, I know it works out more in the long term but finance is quite a good way of spreading the cost of an expensive purchase (i.e. a car) provided it's done sensibly. I had finance for the Scooby, finance for the Wife's car, and I have finance on the 535. I am actually in the lucky position that I could have bought that outright but with the wife on maternity leave at the moment I wanted to keep a bit of my savings back for any eventualities.

Gear Head

iTrader: (2)

+1

Plus it gives you a reason to work hard so you can pay your loan off quicker.
Odd way of looking at it to some, but it works for me.
Half was bought with savings and the other half was a loan.

Then again, we are all multi-millionaires on here aren't we?

Osimabu

iTrader: (2)

It's a ridiculous situation, isn't it? This chap is being asked to pay a huge interest rate to borrow money, and yet those of us supplying the money (ie the ones with savings) can't get better than about 1.5% interest on it from the banks.

I'd love to lend you the money and have you pay it back with 5% annual interest!

Someone is still making a killing, and it's not the savers.

lordharding

iTrader: (1)

I have always paid cash but nothing wrong with finance
If you know you have to pay it back it makes you more responsible
And you don't always save the money in the bank like having to pay it back
To a finance company
Get it now when you can afford to pay it back as when you have wife /
Kids / mortgage etc you will never get a smart car and your only
Young once

Gear Head

iTrader: (2)

I have a wife/kid/mortgage....and a scoob. I'm f&cked!

fpan

iTrader: (11)

No.
Save for a bigger house deposit instead. That should bring down the interest rate for a house loan.
Don't fall into the trick of getting into debt so that the more debt you accumulate can be had at a better deal
Unless you like to sponsor the banks.

rossyboy

iTrader: (8)

I got a loan of about £6k towards my classic back in 2003.

I still have it in my garage.

There's nothing wrong with getting a loan if you can definitely afford the repayments. But I definitely wouldn't pay 12% for one.

Why not save a bit more, then get a loan for a smaller amount?

kirky1

iTrader: (1)

this is what i did when i bought my glanza for £4000: got cash from the bank on my credit card then immediately did a balance transfer from the credit card to another company for 18 month interest free, paid off as much as i could each month then when the 18 month was up i did another balance transfer for another 18 month interest free. The only fee i had to pay was the handling fee to transfer balances on the credit card which is about 1-3% max. still paying it off but ive paid 0% interest so far