Getting ripped off with car finance to get credit score - shall I?

lolage

lolage

lolage

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Hi

I'm 22, and never had any sort of credit before. I have a part time job and am also self employed. I want to get finance but seeing as I've never had a credit card/never had finance before I presume my credit rating is going to be bad.

I basically want to borrow £4000 for a new car, with a "Bad" score its going to cost £123/month, however if I had a "Excellent" rating it would be £76/month. If it was "Average" it would be £106.65/month.

I can potentially get my parents to take out the loan and pay them back that way (presuming their credit rating is good), but then I'm never going to end up getting a credit rating myself?

What would you guys/girls do in this situation?

Thanks

Ben
 
d_brennen said:
Buy a cheaper car. Run said car on a credit card. Pay said credit card off in full every month
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I already have a car which I've had for 4 years. Its getting to the stage where its going to start costing more to maintain than the cars worth.

How long generally will I have to have a credit card for and have a better rating than "Bad"/"Poor"?
 
Buy car from me, your rating only dictates if you get finance or not. It has nothing to do with the rate.

No history isn't a bad thing in my experience, just make sure you're on the electoral roll.
 
lolage said:
I basically want to borrow £4000 for a new car, with a "Bad" score its going to cost £123/month, however if I had a "Excellent" rating it would be £76/month. If it was "Average" it would be £106.65/month.

I can potentially get my parents to take out the loan and pay them back that way (presuming their credit rating is good), but then I'm never going to end up getting a credit rating myself?

What would you guys/girls do in this situation?
Click to expand...

Don't buy a £4k car on the sort of finance offered by random car dealers, you'll spend a fortune in interest and the car will likely be overpriced anyway.
 
Ahleckz said:
Buy car from me, your rating only dictates if you get finance or not. It has nothing to do with the rate.
Click to expand...

This is actually completely untrue, lenders will often accept you at a different rate depending on your credit score. Why do you think APR is advertised as being 'representative'? Because different customers will be offered different rates.
 
You'd be better off paying £2 to get a copy of your credit file to know for sure. Build up your credit rating with a credit card and only spend it on goods you already purchase to pay off in full each month.

It might be nice to spend £4k on a new car to avoid paying for issues on a current one, but would it honestly cost you 4k in those 3 years to keep your current car on the road? As 3 years down the line again you'll have a car not worth much needing more work and would have to re-finance again to get another new one.
 
lolage said:
I already have a car which I've had for 4 years. Its getting to the stage where its going to start costing more to maintain than the cars worth.

How long generally will I have to have a credit card for and have a better rating than "Bad"/"Poor"?
Click to expand...

Spending more money to increase your credit score is a little daft IMO. I have no idea what metrics credit scoring agencies use, but I imagine paying off your credit card (and using it fully) every month for a year, whilst being on the electoral roll won't hurt.

At the end of the day, if you want a £4k car, you're going to have to find £4k from somewhere. Taking the tradeoff of paying more on finance may well be the easiest way

^^ also, the post above
 
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[TW]Fox;25870972 said:
Don't buy a £4k car on the sort of finance offered by random car dealers, you'll spend a fortune in interest and the car will likely be overpriced anyway.
Click to expand...

Was looking at http://www.carloan4u.co.uk/ in particular.

All of the figures are based off 60 months and for £4k.

This is what the credit actually costs:

Bad score: £3399 (£56.65/ month)
Poor score: £2899 (£48.31/ month)
Average score: £2399 (£39.98/ month)
Good score: £1399 (£23.31/ month)
Excellent score: £599 (£9/month)
 
Start using your credit card for daily things and pay it off in full at the end of every month. Might be a pain but its better than actually paying for a credit rating (which is what you will be doing by taking a crap rate loan)
 
lolage said:
Bad score: £3399 (£56.65/ month)
Poor score: £2899 (£48.31/ month)
Average score: £2399 (£39.98/ month)
Good score: £1399 (£23.31/ month)
Excellent score: £599 (£9/month)
Click to expand...

That's crazy. I've never looked into it, but I didn't think it would make that much difference.

Get the loan from your parents and find a more cost effective way of improving your credit rating.
 
I think first thing first is get a copy of your credit file and see what sort of rating you have.

Also as said some dealers just have a set rate and your either accepted or not.

Also as suggested a credit card that you pay off is a good way of building a credit file.
 
lolage said:
Was looking at http://www.carloan4u.co.uk/ in particular.

All of the figures are based off 60 months and for £4k.

This is what the credit actually costs:

Bad score: £3399 (£56.65/ month)
Poor score: £2899 (£48.31/ month)
Average score: £2399 (£39.98/ month)
Good score: £1399 (£23.31/ month)
Excellent score: £599 (£9/month)
Click to expand...

Are you joking?

With those numbers you would pay £7400 to own a £4000 car!

Car finance on cheap cars is just a con.
 
I will just echo what others are saying, it would be a moronic thing to do. And if you're still not convinced have a look at this thread;

http://forums.overclockers.co.uk/showthread.php?t=18019506&highlight=clio+car+craft

EDIT: And learn to deal with the fact that cars cost money to run. I'm regretting binning a £330 car which probably needed about £1000 spending on it, I suspect if I'd done that I'd have ended up with a more solid car then the one I've bought to replace it.

EDITEDIT: And certainly a more stylish car.
 
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Just because your car needs work doing, doesn't mean its not worth doing. What needs doing? Better the devil you know as well.

I would have thought you would be better off talking to your bank to see what they could offer loan wise if you are set on paying for a car this way.
 
lolage said:
Hi

I presume my credit rating is going to be bad.
Click to expand...

Have you actually checked? if you have a contract phone that will count toward your credit score.

It's worth checking your score online and as others have mentioned, shop around for finance, get some quotes and do the maths on the interest/payment period.
 
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