Buying a £20,000 car (loan)

DannyW

DannyW

DannyW

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Hi guys

I know I've already asked about cars in other threads but I think it will work out better to just buy a car

Found a 20 grand loan for £360 a month over 60 months paying back just over £21600

I would probably be looking to buy a 335d x drive, but I wouldn't want to keep it 5 years, probably 2-3 years max

So what would be my options in 3 years time? Ring loan company and borrow another 10 grand? If i paid 20k for a 335d now would it be worth 10k in 3 years time?

I know I'm a complete n00b so please go easy on me, I have only ever leased or bought sub 10k cars before (cash)

Thanks
 
Most places wont extend your credit on a loan. (I assume it is a personal loan you found).

You would probably need to sell the car, pay off any outstanding and start fresh.

Alternatively, some places may offer you a PCP, in which case what you want to do above can happen.
 
Most of my friends or family with new cars have them on pcp

I think I'll go to BMW tomorrow explain my situation and see what they can offer
 
kindai said:
Most places wont extend your credit on a loan. (I assume it is a personal loan you found).
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Never had any issue with this with a personal loan from HSBC. As long as you are still eligible for the new loan, they will essentially allow you to pay off your existing loan with some of the balance of a new loan.

E.g. so you have 6k remaining on an existing loan, and want 10k towards a new car - they allow you to take out a 16k loan, paying off the first one.

Makes no difference to your credit rating either, whether you let a loan run to term or pay off early, as far as I was told.


Out of interest why are you looking at a 60 month loan? If that is the only way you can afford the car, I would be reluctant to commit to that, in case life circumstances change and you are no longer able to meet the repayments. At least a PCP has a shorter fixed term, and HP may have a "buy back" style clause whilst in term (since any interest is normally front-loaded).

(full disclosure - I currently have a 60month loan, but done so purely to give myself more breathing room than if I had taken it over 36 months. In all likelihood it will be paid back within 36 months due to me saving / overpaying where possible)
 
Armageus said:
Never had any issue with this with a personal loan from HSBC. As long as you are still eligible for the new loan, they will essentially allow you to pay off your existing loan with some of the balance of a new loan.

E.g. so you have 6k remaining on an existing loan, and want 10k towards a new car - they allow you to take out a 16k loan, paying off the first one.

Makes no difference to your credit rating either, whether you let a loan run to term or pay off early, as far as I was told.


Out of interest why are you looking at a 60 month loan? If that is the only way you can afford the car, I would be reluctant to commit to that, in case life circumstances change and you are no longer able to meet the repayments. At least a PCP has a shorter fixed term, and HP may have a "buy back" style clause whilst in term (since any interest is normally front-loaded).

(full disclosure - I currently have a 60month loan, but done so purely to give myself more breathing room than if I had taken it over 36 months. In all likelihood it will be paid back within 36 months due to me saving / overpaying where possible)
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Thanks for reply

I can afford more then £360 a month,

Currently I have a lease car (£220) and a couple of months left on a loan which is (£150) so my logic is it won't cost me anymore to have a nicer car

My mortgage is only £415 a month so I really dont fancy paying more for a car.

At the minute, after every payment, I have approx £1500 spare a month, I love living this way

I guess reducing it to 48 months would make more sense and I'd hardly notice it
 
You're better off speaking to the bank rather than BMW - they are just sales guys who will try to convince you that they can offer you an 'amazing deal' where they make the most money.
 
Armageus said:
Never had any issue with this with a personal loan from HSBC. As long as you are still eligible for the new loan, they will essentially allow you to pay off your existing loan with some of the balance of a new loan.
Click to expand...

Which is the same thing, they make you take out a new loan on the new conditions :D
 
DannyW said:
At the minute, after every payment, I have approx £1500 spare a month, I love living this way
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Then surely with that amount of spare cash per month you must have saving for a big deposit you can put down ..:confused:

I paid for my 24k car by paying 50% cash and 50% by loan over 3 years
 
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DannyW said:
I can afford more then £360 a month,

I have approx £1500 spare a month
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Well if you double your monthly payment I know someone who can put you in a shiny nissan gtr or how about a lambo for tripple ;)

(disclaimer, never go car shopping with kindai, your idea of a "budget" will soon disappear :D)
 
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chaparral said:
Then surely with that amount of spare cash per month you must have saving for a big deposit you can put down ..:confused:

I paid for my 24k car by paying 50% cash and 50% by loan over 3 years
Click to expand...

I don't have much saved at the minute it's only recently my wage has gone up and other bills come down
 
Buying a nearly new car from purely a bank loan is a pretty easy way to leave you in negative equity. Depending on your current finances you may want to consider putting down a reasonable amount of cash as well to give you the security of being able to settle the loan by selling the car should your circumstances change e.g. lose you job/ get ill / want to emigrate to Australia etc

BMW finance deals will probably be a lot higher than the most competitive bank rates but also easier to obtain as they are secured against the vehicle. Have you checked you can actually get the representative (headline) rate on a £20k unsecured loan? Some banks also do pretty competitive HP/PCP deals as alternative secured loan options.

Those points may or may not be applicable to you but it would probably be useful for you to read some of the money saving expert car finance guides. Without knowing your personal circumstances if may be a very reasonable or very silly idea to take out a £20k loan for a 3 series.
 
DannyW said:
If I got a loan I would buy a 12-18 month old one
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I just looked up the price of them brand new
BMW 335d xDrive M Sport Saloon
Sport automatic transmission
Diesel
230 kW [313 hp]
Benefit in kind 29% [1]
51.4 - 52.3 mpg [1]
CO₂ emission 143.0 - 145.0 g/km [1]
.£ 41,015.00
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They cost over 40k and you think your going buy a 12 to 18 month old one for 20k

Well if they loose over 50% of there value in 12 to 18 months I would touch one with a barge pole
 
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