is getting car finance different from getting credit?

welshboy · 23 Nov 2006 at 08:16

My credit rating isnt that great, not that im bad at it its just its not that good apparantly, tried to apply for credit in a shop for a tv and got turned down, no reason.

is car finance different as i want to purchase a new car? (please dont give me stuff on saying dont do it, its the only way i can afford a new car and ive discussed it with my parents which they said they would pay my deposit for me)

Guv · 23 Nov 2006 at 08:24

They will still check your credit rating.

There will normally be a company that will offer you credit for a car if you go to a car supermarket, but their interest rates will be high and you might need more of a deposit.

Sone · 23 Nov 2006 at 08:27

paddyuk said:
is car finance different as i want to purchase a new car? (please dont give me stuff on saying dont do it, its the only way i can afford a new car and ive discussed it with my parents which they said they would pay my deposit for me)

if you get turned down for a telly i doubt they will give you a car, unless perhaps your parents sign as guaranteur (correct word?)

i know you said don't try and convince you otherwise but if your credit rating really is that bad are you sure a new cars a good idea?, nowadays £300 can get a reliable old car with tax and ticket.

Slackworth · 23 Nov 2006 at 08:33

Proper car finance tends to be linked to the car so if you want to sell the car, you will have to pay the finance off first or trade it in at a motor dealer.
If you can get a loan from a bank, you will pay less interest (unless you can find a special offer somewhere) and you won't be tied in quite so much.

Just be careful which car you are buying. If you buy a brand spanking new Corsa on finance (just as an example), you will rapidly find the car is worth far less than what you owe.

I see that you are around 19/20. Have you had any credit of any type before? The reason you could have been turned down before is simply due to the fact you have no credit rating possibly?

penski · 23 Nov 2006 at 08:33

I have to echo Sone's sentiment. Why do you need a new car?

Is it worth getting yourself into (more?) debt over something which could be accomplished perfectly well by a £300-500 car?

*n

ste_bla · 23 Nov 2006 at 09:21

Easier in my experience to get car credit as linked to something physical unlike personal finance which is unsecured. Also when/if selling if people HPI check they will see the credit and have a hissy fit unless its paid off. Also most car rates unless paying a high % deposit work out more expensive than bank loan

welshboy · 23 Nov 2006 at 11:49

im not in debt

im 21 coming on 22

I can confortably afford a new car on finance and will pay it off by next year anyway.

i need a new car, ive had so many problems with mine this year that ive had enough and reasons for getting a new car outway.

its not a brand new car im buying, its second hand as i know buying a new car would devalue straight away, and im only really looking for a car less than 5grand anyway which i will quite easily be able to pay off in less than a year.

Scrutinize · 23 Nov 2006 at 12:02

paddyuk said:
im not in debt

im 21 coming on 22

I can confortably afford a new car on finance and will pay it off by next year anyway.

i need a new car, ive had so many problems with mine this year that ive had enough and reasons for getting a new car outway.

its not a brand new car im buying, its second hand as i know buying a new car would devalue straight away, and im only really looking for a car less than 5grand anyway which i will quite easily be able to pay off in less than a year.

If you have a decent deposit then you should be ok. Its worth sigining up for www.creditexpert.co.uk just to make sure there is nothing wrong and as its free for 1 months always useful.

Are you on the electoral role as that can be the biggest problem in getting credit second to ccjs, etc etc

jimblowscash · 23 Nov 2006 at 12:09

just avoid anyone that offers " no credit refused" or " ccj's poor credit accepted) these firms make silly ammounts of money by selling overpriced cars at riducolus interest rates to people who have no option, if you have to go down that route then shop arround for the money, ask your bank and dont pay anything over 9% for a loan

Rhyzz · 23 Nov 2006 at 20:25

There are loads of different ways you can go about finance, a loan is just a lump sum of cash in your bank and you pay it off monthly.

Finance you can take what is called a PCP deal. You put down a deposit, depending on how much you put down lowers the monthly repayments. They then give you a guarenteed value for your car after 2/4 years, and you only pay the finance up to that amount.

Example, you get a £5k car and put down a £500 deposit. The dealer guarentees you £2k for the car if you do under 20,000 miles in 2 years. You will only need to pay off £1500 in the 2 years, making your monthly repayments much lower than if you were paying £3500. At the end of the term, if you want to keep the car, you pay off the £2k in a lump sum, if you don't, you simply hand the car back and you're clear of any debt, although you don't have a car.

It's a choice a lot of people take who like changing their cars, they are simply leasing the car basically. It's a good deal for both parties if you like new/expensive cars and can't really afford the full whack of the cost.

dilated · 25 Nov 2006 at 19:33

paddyuk said:
im not in debt

im 21 coming on 22

I can confortably afford a new car on finance and will pay it off by next year anyway.

i need a new car, ive had so many problems with mine this year that ive had enough and reasons for getting a new car outway.

its not a brand new car im buying, its second hand as i know buying a new car would devalue straight away, and im only really looking for a car less than 5grand anyway which i will quite easily be able to pay off in less than a year.

If I were you, a low rate bank loan is the best bet - second hand car dealers finance will cost a lot more.

Lord-Jaffa · 26 Nov 2006 at 00:51

paddyuk said:
My credit rating isnt that great, not that im bad at it its just its not that good apparantly, tried to apply for credit in a shop for a tv and got turned down, no reason.

is car finance different as i want to purchase a new car? (please dont give me stuff on saying dont do it, its the only way i can afford a new car and ive discussed it with my parents which they said they would pay my deposit for me)

Some companys do a creditcheck on your house, aka the one you tried for the telly im betting, most banks/building societys do a personal check.

I was turned down for an 800quid telly also because of my brothers non payment of £2000 worth of stuff from the place i tried to order from (same address at the time), yet i had no problems at all getting a 10 grand loan (personal loan) for a car.

Geoff · 26 Nov 2006 at 03:28

Lord-Jaffa said:
....
I was turned down for an 800quid telly also because of my brothers non payment of £2000 worth of stuff from the place i tried to order from (same address at the time), yet i had no problems at all getting a 10 grand loan (personal loan) for a car.

When was this?

If more than a couple of years ago, then yeah, it could be. But it should not happen any longer. ONLY people with whom you have a financial association should have any bearing on, or even show up on, your credit record. It is no longer sufficient just to have the same surname or live at the same address. So now, your brother's problems should ONLY affect you if you have such a financial association (such as a joint account, joint mortgage, have made joint loan applications, etc).

To check, get you credit reports from Experian and Equifax. If you brother's problems are still showing up (and you don't have any financial association like those mentioned above) file a financial disassociation with the credit bureaux and they'll remove and inappropriate linkage.

Geoff · 26 Nov 2006 at 03:33

paddyuk said:
My credit rating isnt that great, not that im bad at it its just its not that good apparantly, tried to apply for credit in a shop for a tv and got turned down, no reason.

is car finance different as i want to purchase a new car? (please dont give me stuff on saying dont do it, its the only way i can afford a new car and ive discussed it with my parents which they said they would pay my deposit for me)

Bear in mind that companies don't just check your credit rating and make their decision based on that third-party information. They typically use a scoring system based on a variety of information, among which obviously your credit rating is important, but is not the only factor. Other things will include where you live, whether you're married, how long you've lived at your current address, and so on. And different companies score in different ways, even given the same information. Getting turned down in one place is not entirely inconsistent with getting accepted somewhere else.

Oh, but don't think that suggests a machine gun approach to applications for credit because you'll hit lucky sooner or later, because that can have an adverse effect, too, if numerous applications show up in a short period of time.