Car Loan?

stoofa · 3 Sep 2008 at 00:49

[TW]Fox;12417414 said:
If you dont even have finance secured on the vehicle you wont have a shortfall!

I owe my mum £8k
I will be paying her this over the next 3-4 years.
It is a loan - sure it is a family loan, there is nothing in writing and I'm not paying interest on it.

It I write the car off then I am going to want to replace the car like for like.
The GAP insurance I have is not based on the fact there is or isn't finance on the vehicle.
It is based on the fact that should I write the vehicle off I may or may not have the funds to replace the vehicle.

The policy I have taken out guarantees the difference between any insurance settlement (should the vehicle be written off) within the next three years and the amount I paid for the vehicle.
So in theory I could drive my car around for 2.99 years.
I could write it off and I wouldn't care what the insurance company offered me as the GAP insurance means I get what I paid for the vehicle.

As this policy really isn't costing me that much at all - it means for the next 3 years I'm covered to the amount I've just paid for my car.

Begbie · 3 Sep 2008 at 00:49

[TW]Fox;12421492 said:
So thats £3.61 a month?

£130 per month.

stoofa · 3 Sep 2008 at 00:51

merlin said:
Has the GAP Insurance been assigned to your parents then?

No - to me.
As somebody else mentioned, it's a "back to invoice" GAP insurance.
Car written off in 3 years, insurance company give me their offer, GAP gives me the rest right up to invoice price.

Jonny ///M · 3 Sep 2008 at 00:52

What is the best way to do this? I would imagine getting a bank loan for the car amount + years insurance + some extra for when it goes wrong over 3 years?

I'm talking about a first car between 1k and 2k max.

[TW]Fox · 3 Sep 2008 at 00:58

stoofa said:
It I write the car off then I am going to want to replace the car like for like..

Which you could do without GAP - crash your car in 2 years time and like for like is not another 1 year old Skoda, it is a 3 year old Skoda, which could be purchased for the settlement figure from the insurer.

Overlag · 3 Sep 2008 at 00:58

traded in my old fiesta for 4k, and paid 5k from a 8k loan.

£250pm over 3 years @ 5% i believe it was. Shock horror!

(wish id sold my shares instead tho, a massive slide after i brought this car... lost almost 4k... DAM YOU! lol)

Sone · 3 Sep 2008 at 08:40

i have been tempted a few times to get a loan for a car.

I even applied online at nothern rock and was quoted something like 6.9%, when the paperwork came through it was 11.9%. Don't think i would consider a loan now, only reason i would is if i need a car x years old for a job but i could afford a year or 2 old rep mobile now

panthro · 3 Sep 2008 at 08:43

[TW]Fox;12421364 said:
What do you think? I mean honestly, do you really think he financed £130 for a car over 3 years?!

I know what I thought, I just wanted to clarify

stoofa · 3 Sep 2008 at 10:10

[TW]Fox;12421534 said:
Which you could do without GAP - crash your car in 2 years time and like for like is not another 1 year old Skoda, it is a 3 year old Skoda, which could be purchased for the settlement figure from the insurer.

But for the sake of a £350 insurance policy I get the full invoice price I paid for my vehicle should it be written off within 3 yrs.
Less than £10 a month.

Pookie Bear · 3 Sep 2008 at 11:13

I currently own my car outright, but have down the whole loan thing. I'm happier this way

Pookie Bear · 3 Sep 2008 at 11:18

stoofa said:
But for the sake of a £350 insurance policy I get the full invoice price I paid for my vehicle should it be written off within 3 yrs.
Less than £10 a month.

I did the same as you. I paid £7200 for my car last year and paid gap insurance as well. Considering the list price for my car is currently about £5200, I consider it well spent. However, I did anticipate keeping the car for the full three years which now isn't happening. When I replace my motor in two months, I'll probably do it again (but I intend my next car to last longer).

[TW]Fox · 3 Sep 2008 at 11:26

Luw said:
I did the same as you. I paid £7200 for my car last year and paid gap insurance as well. Considering the list price for my car is currently about £5200, I consider it well spent. However, I did anticipate keeping the car for the full three years which now isn't happening. When I replace my motor in two months, I'll probably do it again (but I intend my next car to last longer).

So once your car is gone you will in effect have paid £300 or whatever for absolutely nothing. Is it still money well spent?

panthro · 3 Sep 2008 at 11:28

[TW]Fox;12422809 said:
So once your car is gone you will in effect have paid £300 or whatever for absolutely nothing. Is it still money well spent?

You can argue that against any optional insurance policy.

Skiddley · 3 Sep 2008 at 11:30

Bought with mine with this year's bonus.

[TW]Fox · 3 Sep 2008 at 11:31

panthro said:
You can argue that against any optional insurance policy.

Exactly, and I will do. The amount of money companies make from these insurance policies is ridiculous. The very fact they can offer you thousands of pounds worth of cover for 300 quid goes to demonstrate how low the payout ratio is.

Car insurance itself is a good deal - something like an 80% premium

ayout ratio. But mobile phone insurance, GAP insurance, payment protection, blah blah blah it's all there for their benefit not yours. It sounds appealing - until you realise 3 years down the line you just wasted 300 quid on nothing.

Only insure what you cannot afford to lose.

merlin · 3 Sep 2008 at 11:44

What you are paying for is peace of mind. That is the product you get, it has a cost. However, the product expires. That said, when the product expires you can't look back and say "what a waste" after enjoying said product. If something like this is good value for money at the time of the purchase it'll remain good value for money.

But still - it's largely a con and 40% commissions are commonplace.

All these added extra sales things make me seeth - you can't even buy shoes without being pressured into buying some can of **** to protect them.

stoofa · 3 Sep 2008 at 11:56

[TW]Fox;12422845 said:
Exactly, and I will do. The amount of money companies make from these insurance policies is ridiculous. The very fact they can offer you thousands of pounds worth of cover for 300 quid goes to demonstrate how low the payout ratio is.

Car insurance itself is a good deal - something like an 80% premiumayout ratio. But mobile phone insurance, GAP insurance, payment protection, blah blah blah it's all there for their benefit not yours. It sounds appealing - until you realise 3 years down the line you just wasted 300 quid on nothing.

Only insure what you cannot afford to lose.

It is what ALL insurance is about.
So I buy house & contents insurance.
1 year later I haven't made a single claim.
Nothing happened, nobody broke anything, nobody stole anything, nothing got damaged.
So I "wasted" all that money because I didn't have to spend it because I didn't need to make a claim.
Now I personally don't see that as a waste of money.
It was peace of mind for a year and if something had happened then I'd have been fully covered.

Now if nothing happens to my car in the next three years then great.
I've "wasted" in your eyes, spent pocket money in mine giving me some peace of mind.
That peace of mind being that if everything went wrong and the car gets written off (and that can happen to anybody at any time) I have the full invoice price I paid for my car to go and buy a new one.
That means I can buy another 18 month old car in the same condition as the one I've just bought.
Without this little policy, should the worst happen then I'd be simply replacing like for like - another Jan 2007 model be it 18 months old or 4.5yrs old (depending on whent he write-off happened).

What I have bought for my £350 is 3yrs Peace of Mind - if I don't claim I still had those three years peace of mind, I've still had my product.

All insurance is a gamble.