Car Loan - Long Term recommendations

pigeonguyuk

pigeonguyuk

pigeonguyuk

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Bangor - Northern Ireland
Hi All

Im looking recommendations for companies that would offer an unsecured personal loan for a vehicle purchase over 10 year period. Loan Value will be between 10-12.5K

I want to keep monthly repayments to a bare minimum hence the loan timescales. However i'll have the intention of having the loan cleared over 5-6 years once other investments mature.
 
I don't think personal loans generally go longer than 7 years.

Your investments must be earning a fair whack for it to make more sense to pay interest on the loan over such a long time! The added interest alone over the 7 years (vs. 5) will cost more than £1000 more!!!

/edit: you should also expect to see interest rate increase over >5 year terms. E.g. Sainsbury's (who are one of the most competitive lenders in the £7,500-£15,000 bracket) increase from 3% at 5 years to 5% at 7 years (the max).
 
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Its shares so its a hit and miss about any potential gains they will make in the next 5 years. The investment amount will easily cover any remaining amount on the loan.

Yes when you look at total repayable amount the interest difference from 6-10 years is probably £2k but if paying off early you would get an early settlement figure and maybe have pay an admin fee but im happy to have this happen so I can get the car ive always wanted :)
 
As Havana points out, the interest rate rises considerably once you go above 5 years. It's not just the extra time years of accrued interest that you need to consider. Sainsbury's rates rise from 3% for a five year loan, to 5% for a 7 year loan (they don't go further than that).

One option is to look at PCP for that car. That way you're only paying off part of the value over up to 48 months. You could then refinance the GMFV using a 5 year personal loan once the PCP ends. It depends how the figures stack up though.
 
This has bad idea written all over it.

If the car you've always wanted is 10k I'm going to assume it's reasonably old and therefore over the period of the loan will get even older with a commensurate increase in cost. Do you really want to be in a position where you are servicing a loan on what might at some point during the term be a 15 year old car?
 
satchef1 said:
As Havana points out, the interest rate rises considerably once you go above 5 years. It's not just the extra time years of accrued interest that you need to consider.

One option is to look at PCP for that car. That way you're only paying off part of the value over up to 48 months. You could then refinance the GMFV using a 5 year personal loan once the PCP ends. It depends how the figures stack up though.
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Unfortunately the PCP option isn't available as it will be a 2nd hand 2007 WRX STI that will be purchased. I'd love to be able to afford a PCP deal on the new 2017 model lol
 
pigeonguyuk said:
Unfortunately the PCP option isn't available as it will be a 2nd hand 2007 WRX STI that will be purchased. I'd love to be able to afford a PCP deal on the new 2017 model lol
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You can get PCP deals on used cars too. Dealers offer them. Or you can get your own from a finance provider like Admiral.
 
pigeonguyuk said:
Unfortunately the PCP option isn't available as it will be a 2nd hand 2007 WRX STI that will be purchased. I'd love to be able to afford a PCP deal on the new 2017 model lol
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Don't take this the wrong way but if the only way you can buy a 10 year old Subaru is a 10 year loan then you can't afford to run one and should think really hard about this whole idea.

You'll still be paying it off when the car is almost 20!?
 
That's a good point. It's going to need a lot of maintenance the older it gets. You don't want to be tied to finance on it.
 
When it inevitably spins a rod bearing you'll be very upset about paying for a loan that you have nothing to show for. You sound young if you're looking at all this and expecting shares to pay for it in a few years.

Definitely save up to purchase this.
 
[TW]Fox said:
This has bad idea written all over it.

If the car you've always wanted is 10k I'm going to assume it's reasonably old and therefore over the period of the loan will get even older with a commensurate increase in cost. Do you really want to be in a position where you are servicing a loan on what might at some point during the term be a 15 year old car?
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It wouldn't bother me as the car im purchasing is holding value. Majority of cars lose most of their value in the first 5 years. If I even source on of the limited edition GB270 or RB320 models then the value will hold and or even increase in value .
 
loan and questioning finances for a 10-11 year old STI Scooby, walk away... high tax, high insurance and high loan premiums means it's going to cost you a lot more than you imagine. Upkeep alone, especially over 10 years, could be horrific. if it has been looked after and not ragged about when cold, which you have no idea about (but you can guarantee that a 10 year old STI WILL have been ragged about a fair bit during its life), then it could be ok, otherwise you could be looking at a new turbo during that time. It will only hold its value if it's kept immaculate, unmodded and low mileage, which means choosing that ltd edition 10 year old STI v tricky, not using it, keeping it garaged and serviced at specialists, and it will no doubt already be above any budget you've set yourself. I seem to remember someone at a previous job having a STI and complaining that they'd just put it through a service and with parts and replacement sticking brake calipers, pads and discs was a 2k bill... I'm sure that was a 1 off, but you could well imagine some equally horrific bills during 10 years of STI's ownership, and that's before thinking it's already 11 years old...

Shares, you can't guarantee a return, especially with Brexit, we just don't know how things will play out, so it's potentially naive to be spending an assumed income before it's happened...
 
Have a look in the Subaru thread for ideas on costs of ownership, avoid anything with the 2.5 engine as it will require a rebuild at some point which if you're having to worry about financing it over 10 years would be a bit of a shock when a 3k+ bill comes out of the blue. They're not bad to run if you can do all the stuff yourself as the bits are cheap but being an ageing performance car it does need quite a lot of up keep which really adds up if you can't do it yourself.

While they may (or may not) hold their value you still need to maintain them so i'd never view them as an investment as overall unless you do hit lucky like some cars like 911's or an NSX you probably won't win overall.
 
If you're having to take such a long term loan out for what's a relatively small amount on a depreciating asset, the only people loaning you will be sharks or close to sharks.

Personal loans are either to be able to buy something upfront over short-medium term or to invest in an appreciating asset.
 
As the others have said I think you'll just end up in a world of pain if you go down this route, I can understand that you might really *really* want that 2007 Sub but imagine you'll be pushing 40 when you pay it off *if* you're shares don't fail you. Sometimes waiting is definitely the best option.
 
Please do not buy a 2007 WRX STi with a 10 year loan. It will need money put into its engine at some point, and it'll likely cost you around half of what you paid for the car!
 
pigeonguyuk said:
Its shares so its a hit and miss about any potential gains they will make in the next 5 years. The investment amount will easily cover any remaining amount on the loan.
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Shares don't 'mature', as you put it. Perhaps you're talking about some guaranteed capital equity bond instead?
 
pigeonguyuk said:
It wouldn't bother me as the car im purchasing is holding value. Majority of cars lose most of their value in the first 5 years. If I even source on of the limited edition GB270 or RB320 models then the value will hold and or even increase in value .
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I don't think you'll be getting a rb320 for £10k. You are best off getting a wr1 or 2005 ppp with lowish mileage. To hold its value it will need to be serviced a lot and not move much to avoid maintenance costs. It's also a 2l so less likely for you to need to rebuild the engine.

I have thought of doing this myself but tbh it's just sad to have a nice car sit there and not move. They will go up and I know they do go up as the p1's are crazy expensive now for the nicer examples.
 
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