Heard an item on the radio recently which quite surprised me. Apparently consumer borrowing in the UK is growing by £1m every four minutes - much of borrowed to spend on cars.
This item reminded of an incident recently when I was selling a Mercedes (a W202). The buyer was organising a loan to buy the car. He also wanted to put a 'cherished number' on it so I helped him sort out the DoT paperwork.
The number was of the form XYZ 123A (i.e. the old style introduced in the 1960's). The number didn't look anything special at all to me - but the 'XYZ' bit was his initials. I was staggered to learn that he'd paid just short of £1000 for this number - and borrowed the money to buy it! As my grandfather used to say, "A fool and his money don't stay together for long".
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For anyone looking for a bit of help & advice on £$£$£, the place to go is Martin Lewis's site (the guy from tv & radio)
www.moneysavingexpert.com
I's a totally free site & works on a smilar basis, as we do here & a riendly bunch of contributors, too!
VB
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I might also recommend the Consumer Credit Counselling Service, which is a charitable organisation.
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Please keep this motoring-related. I can already see scope for digression...
smokie, BR Moderator
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I find it surprising how many of my contemporaries are quite willing to plunge themselves into £6/8/10k of expensive debt in order to drive the newest and flashest motor they can get their hands on. I might be envious of their nice cars, but I'm not envious of their negative bank balances.
Ed.
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So how do people with the yearning to do so, finance the purchase of a £40k car? Unless it is provided as an employment perk, it requires either borrowing, or dipping into savings.
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IMO all related to the property boom...I have no doubt that many of the shiny cars sitting on driveways are paid for "outright" by mortgage equity withdrawls - when in fact all the owners are doing is paying them off over 20/25 years, long after they have gone to a scrapyard or are worth buttons.
I (and a lot of other people) could go out tomorrow armed with a chunk of cash released from the value of our homes so we can impress the neighbours with the shiny new Mini-cooper convertable by buying something worth more than that - but are not that vain.....
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I remember being laughed out of The Bank at the tender age of 19 back in 1977 after seeking a loan of £300 towards my first car. They would n't let you borrow unless you could put up at least a third of the purchase price.
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The fundamental difference these days (i.e., since financial services deregulation in the 1980s) is that banks, credit card companies, specialist loan companies go flat out to SELL you money.
Whether it's a loan for a car or a TV or something else, the game they play is calculating what it will take for you to start paying interest on the loan without defaulting. That's what's known in the trade as 'performing debt', that's why they push the limit up on your credit card without you asking.
Just be aware of that next time you talk finance over a car...
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In my young days you could only get a loan if you could show you did not need it! But at least you were turned down with grave politeness.
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Obtaining cheap debt via your mortgage to help finance a nice car is OK within reason. What matters is the size of your mortgage repayments in relation to your salary. This should always be kept to a comfortable(ish!) level.
If people have some "slack" and they wish to spend it on a car rather than upgrade their house or retire early, good luck to them. What's the point in spending every last penny on the roof over your head when a considerable amount of time is also spent in the car?
Advice point: don't overdo it as the car will depreciate faster than the loan is repaid, so successive car purchases could hurt and there's no escape!
--
Mattster
Boycott shoddy build and reliability.
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