Looking to get a loan for a car for work, need to get a loan to be able to afford it. I have an average credit history marred only by the fact that I have moved house recently. I have been offered 16.9% APR for 10k over 5 years by my own bank. is this expensive given my circumstances or should I look around?

Might be a good idea to check some of the comparison websites.

That certainly sounds expensive – as suggested though, have a look at moneysavingsupermarket or similar to get an idea of what's out there and how reasonable it is for your circumstances.

they only give you typical APRs and the only way to get a real quote is to go to each provider and get them to check for you which goes on your credit file. 🙁

Not IME – they're fairly representative.

Unless maybe your credit history is particularly bad or unusual compared to your numbers (eg salary, outgoings).

zopa

Well, you can currently get a credit card with 13 months interest free on purchases….. Buy it on that, pay off as much as possible then either keep transferring between cards (for a small fee) or shop around for a low rate loan.
Mrs PP did it with a motorbike and didn't pay much in charges/interest a few years ago and it looks like we'll be doing it again next year….

16.9% APR is typical for a credit card; loans are usually cheaper than that.

Sainsburys bank, for example, is offering 7.8% APR if you have a Nectar card: http://www.sainsburysbank.co.uk/borrowing/micro/bor_loans_agg1_apply.shtml?source=NETVLSSMLOANAGG10001

At the rates offered you'll be spending £5k over 5 years purely on interest – so spend less, £2k should be enough to get a reliable car – and even if it takes two £2k cars to get you through the five years, you're still quids-in.

Yes, go to Zopa, I may able to do you a deal! (But only for £10)

Sainsburys bank, for example, is offering 7.8% APR if you have a Nectar card:

this is a TYPICAL APR not APR. only two in three of the people who apply for those will get that rate.
I don't have a bad credit history according to experian and the only thing that they could see an issue with was the fact that I have moved house twice in the past three years.

Hahahah Sainsburys rate is bollox, I applied yesterday came out nothing like that was nearer the 16.8% above and was turned down. Alliance and Leceister were happy to lend me more at the same rate.

Been loan free for 3 years was loving it but boiler has died and need a new one so back into loans I go.

If you're getting the car from a dealer why not get them to qoute you? If it saves you money go for it and as it's a secured loan rather than a personal loan if you change the car or pay it off early you are in a better position. If it doesn't save you money don't take it and stick with what you have arranged already.

If you're getting the car from a dealer why not get them to qoute you?

because PCP and HP cars have a maximum amount of mileage (usually 10k PA) and I will be doing at least double that PA. Also, they usually require a deposit.

You'd be far better off buying a car that you can afford rather than paying £15,000 for a car that used to be worth £10,000.

im not spending 10k on a car. i'll be spending 8k Max. I didn't ask for advice on what car I should buy and whether I can afford it or not is irrelevent (I can by the way)

If you really need a car for work, get them to give you a company car.

If you just need transport, drop £2-£3k on something OK. Don't take out a 10K loan at 17% interest to buy something that will lose most of its value before the loan's paid.

Putting big miles on your personal transport for work is a mug's game in my book. Yes, you do get expenses, and you can make a bit on them if you get good economy and aren't hit by too many repair bills. But all the stuff you have to do to a car has to be done twice as often, and it's a pain in the arse.

Whereas if it were a company car, you'd just stick it into their dealer every time something needed doing. And generally you'd be doing that on their time, not on your saturdays.

I have an average credit history marred only by the fact that I have moved house recently.

Who said that?

I have been offered 16.9% APR for 10k

Honestly, I'd rather not buy the car. Honestly.

That sounds an expensive rate to me. Might be better advised to choose a car from a dealer that is offering 0% finance (and fund the deposit via cc). You might end up paying more than 8k for the motor but may end up paying the same overall after 5 years (and possibly have a better re-sale value on your car)?

Go to the dealer for a quote. Dealers are keen to shift cars; loan companies are keen to hold onto their cash. So dealers give far better rates.

A year ago (ish) I had to get a new car, dealer offered me something like 7% against 14% from my regular bank with whom I have a lot of dealings.

I certainly wouldn't be paying that – I'd feel like I was being bent over.

Most of my mates have all turned to buying diesel vectras and mondeos. £5k will get you a top of the line full loaded ex company car with full dealer stamps, that will last you years

they should be paying you to look after their money as there's a chance you won't need a government bailout…

another happy Zopa borrower here. I like the over pay without penalty as well.

if you own your house, can you not just get the money added onto the mortgauge? you have to overpay in order to take it over 5 years, rather than the full 20-odd, but if you do you'll be looking at a worst case of 6% apr rather than 16..

17% sounds pretty bad, dealers can sort out finance though, so might be worth asking them and seeing what they can get

Most of my mates have all turned to buying diesel vectras and mondeos. £5k will get you a top of the line full loaded ex company car with full dealer stamps, that will last you years

these are what I have been looking at actually but the newer ones (upto 3 years) are nearer 7k and are quite rare as I was looking for an estate too (im picky.)

I agree the 16.9% is very expensive and I started this thread to see if this was average or if the loan providers are hanging an impossible-to-grab carrot. I most certainly won't be accepting this offer!

if you own your house…

I don't.

Zopa: front page quote

Borrow £7000 over 36 months from as little as 9.0% APR

* Typical APR
* 9.0%
* Per month
* £221.31
* Total repayable amount†
* £7967.16

Zopa rates still depend on the risk of defaulting, but should be cheaper than a bank as they're not a bank, if that makes sense, just lots of people with money to lend and lots of people wanting to borrow.

Barclays offered my 8.8% a couple of weeks ago, although I think their standard rate is higher. They did also say that they would beat any other comparable loan companies. These figures are ridiculous though with the base rate at 0.5%. My last car loan was taken out 4 years ago, with a much higher base rate and I paid 6.2% … I think we're all being asked to pay for the banks' expensive past mistakes 🙁

BTW, have you looked at diesel Skoda Octavia estates? We've just sold one with 137,000K on the clock and we did not pay a penny in repairs during the 70K we put on it, just servicing every 20,000 miles, new brake pads and a cambelt (i.e. only routine stuff). Despite being of the generation that grew up with Skoda jokes, OH and I were so impressed with it that we've just got a newer one (with 6K on the clock!!!). It looks good, is economical and reasonably nippy. Not overly expensive either.

Cue Skoda jokes …

can you not just get the money added onto the mortgauge

Why?!"!!!!!!!

Do you really need a car at that price? What if you want to buy anytime soon?

Also why not just 'borrow' your mortgage deposit and buy a cheap banger to get around in? 😉

Why?!"!!!!!!!

because the op was asking if 17% is a good rate to borrow money at (it isn't) and if there were cheaper ways (there are, as demonstrated)

equity withdrawl from a house isn't a bad thing, if done right. it's almost certainly the cheapest way of borrowing money for the vast proportion of the population. Why pay more?

These are what I have been looking at actually but the newer ones (upto 3 years) are nearer 7k and are quite rare as I was looking for an estate too (im picky.)

Diesel estates always carry a fair premium. Even when they're complete rats, they still seem to ask around £1k. 3K tends to pick up a 5yo example.

We paid around £7k for a nice Mondeo estate two years ago. Loan for about £6k over two years at something like 7% (was cheaper to borrow £6k than £5k due to the interest rate bands)

It didn't make financial sense…we sold the car a year later as it was a constant worry that something big would go pop and land us with a £1k repair bill, (flywheel and/or injectors) plus various neighbours kept bumping into it whilst trying to park. We managed to get some rust issues on the inner door sills sorted under the corrosion warranty just weeks before it ran out, and probably only a few months before it started rusting through to the exterior paintwork…that was a bit stressful as it would have cost a fortune to sort out ourselves! We could have bought essentially the same car with a few extra miles on the clock and a few years older, saved £3k and not had to worry about muppets bumping into it, but still had the same model, equipment levels and safety standards. Hindsight eh?! We are a couple of months away from paying off the loan…

At those interest rates you'd be mad to buy something that in itself will depreciate.

equity withdrawl from a house isn't a bad thing, if done right. it's almost certainly the cheapest way of borrowing money for the vast proportion of the population. Why pay more

How does that work? Surely you'd be borrowing circa 4% at a much longer term as you are putting the loan ontop of the house borrowing over the length of the mortgage.

How does that work? Surely you'd be borrowing circa 4% at a much longer term as you are putting the loan ontop of the house borrowing over the length of the mortgage.

But if you can overpay on the mortgage to the tune of what the 16.9% loan would have cost you for what the length of the loan would have been is this not the same thing as borrowing the amount that the loan would have been at ~4%

Sorry, OP, guess this doesn't help you as you said that you don't own your own house, but wanted to ask the question.

I also know that you didn't ask 'what car for xxx' but Skodas are seriously good these days and £4k-£5k should get you a very reliable Octavia (from personal experience). Sorry, OT I know.

I would like to try a Skoda but I have my eye on a 57 plate Astra 1.9 TDi top spec estate for 6.5k with just over 50k on the clock but I need to get this loan sorted first as I have no Capital of my own.

Zopa don't have my address in their database and you have to email them to get Experian to update their database first (seems a bit of a ball ache!) but I am liking the fact that there is no payback early fees!

im not spending 10k on a car. i'll be spending 8k Max. I didn't ask for advice on what car I should buy and whether I can afford it or not is irrelevent (I can by the way)

Sorry, but if you need a loan, you can't afford it.

Sorry, but if you need a loan, you can't afford it.

I disagree. Credit is not intrinsically bad.

I have a nice car 'cause I can' – so get a good deal and get some luxury in your life….

However 16.9% is far too high…….

7.9% sounds a bit more realistic – all the banks are waiting for the jump in base rates so won't lend much less…

once you go above £7500 with Alliance & leicester you get a better rate. check out what they offer over the likes of 2 years.. or 3.See if they will be happy to do it for you without payment protection because blah blah (explain to them why yer going to be one of their easiest ever customers to deal with ;O) ) and hopefully they will give you what you want.

maybe have a look at martin lewis/money saving expert.com or whatever he calls his website. the list had A&L as quite a good option. Ive had a few loans with them in the past 12 years and the deals without payment protection were very good.