Getting a Car Loan?!?

Hi All,

Back for advice from you lovely people! I've been looking for a car since passing my driving exam and am having trouble getting a loan, which I've been told is because I'm still on a Tier 2 visa. Basically, the two lenders I've tried either offered an insanely high APR even after telling me over the phone I'd likely get a normal APR of 3-6% based on my credit score and income OR they won't approve me for a loan longer than the length of my current visa despite the fact that I have full time permanent employment and am definitely not going anywhere. Surely there must be some way to get a longer personal loan at a reasonable rate?   Basically, my problem isn't getting approved for loans (both lenders approved me), but it's getting something at a fair APR and at the term length I want. Car dealers want to get me to do PCP but I'd like to avoid this option as I want to keep the car.

Thanks for any help as I'm desperate to get a car ASAP with all this covid mess!

Hi All,

Back for advice from you lovely people! I've been looking for a car since passing my driving exam and am having trouble getting a loan, which I've been told is because I'm still on a Tier 2 visa. Basically, the two lenders I've tried either offered an insanely high APR even after telling me over the phone I'd likely get a normal APR of 3-6% based on my credit score and income OR they won't approve me for a loan longer than the length of my current visa despite the fact that I have full time permanent employment and am definitely not going anywhere. Surely there must be some way to get a longer personal loan at a reasonable rate?   Basically, my problem isn't getting approved for loans (both lenders approved me), but it's getting something at a fair APR and at the term length I want. Car dealers want to get me to do PCP but I'd like to avoid this option as I want to keep the car.

Thanks for any help as I'm desperate to get a car ASAP with all this covid mess!

If you can afford it, pay cash for something cheaper.

Why not buy a cheap secondhand car with cash?

Secondhand cars are really cheap here compared to the US and you can get a pretty decent one for a good price.

I’ve bought 3 used cars in the U.K. in the last 15 years and they cost me £800, £2950 and £5000 (I was only planning to spend £3000 on the third one but I ended up deciding to splash out a bit for a newer model). They lasted me about 5 years, 8 years, and I’ve had the current one for almost 2 years.

Each of them were between about 6 and 10 years old and only had about 50,000 miles on the clock.

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We can afford cash but want to start establishing credit here too. It's like a Catch 22. Can't get a loan because you don't have enough credit history, but can't get credit history without a loan. I feel like I'm 18 again. 

Re: secondhand car I think the main issue is we must buy automatic as I can't drive manual. There are way fewer cars to choose from for automatics and most of them are super tiny which won't really suit our situation as we have kids and big ERF carseats that need to go in the back along with the kit that goes with small children (so bigger boot is a must). I've been looking in the small hatchback size with cars like Ford Focus, VW Golf, and Honda Civic.

We can afford cash but want to start establishing credit here too. It's like a Catch 22. Can't get a loan because you don't have enough credit history, but can't get credit history without a loan. I feel like I'm 18 again. 

I'd say that with Covid, the car takes priority over building your credit. Having said that, you can pay your insurance monthly, it costs a bit more but it'll help with the credit rating.

Re: secondhand car I think the main issue is we must buy automatic as I can't drive manual. There are way fewer cars to choose from for automatics and most of them are super tiny which won't really suit our situation as we have kids and big ERF carseats that need to go in the back along with the kit that goes with small children (so bigger boot is a must). I've been looking in the small hatchback size with cars like Ford Focus, VW Golf, and Honda Civic.

Ah, yes, this does limit your options a bit. Obviously everyone has their own reasons for choosing to sit the test in an automatic but for newcomers reading this, it really is a good idea to just bite the bullet and do the test in a manual if you possibly can. It doesn't mean you can't then drive an automatic anyway but you will still have the option of both.

I don't know how much help this will be in your circumstances but here's Martin lewis's guide to car finance.
https://www.moneysavingexpert.com/car-finance/

Keep looking, hopefully something suitable will come up before long.  Best of luck!

Cash all the way.  One of my favourite things about living in the UK is how terrible cars are at retaining their value.  Sounds odd but as a finance person, cars are a terrible way to spend money.  My poor husband will never own a new car.  But we have had the most maxing second hand cars here!  I’ve had FUN cars!

I’d recommend a trip to Car Giant in Greater London.  They hold the Guinness world record as the largest second hand lot!  Almost exclusively former fleet vehicles.  You can see everything online before you travel there.  It’s not glamorous but it’s flat price and very fair.

I’ve decided my next car is a Bentley Continental convertible.  My mean husband is making me wait to finish our home extension first.  By the way, this used is less than a brand new Fiat.   

Ditto on paying cash if you can. I'm in a similar situation, in that I'm waiting for my ILR to be approved. It doesn't look like that's happening anytime soon though, and I really need a new car. Meanwhile, my bank can't approve my loan without ILR- I explained the situation, but unfortunately they didn't make any exceptions for Covid and extended visa wait times...

Admittedly, I'm a brand snob and strongly preferred Toyotas or Hondas. But, I expanded my search and found a car that I didn't really consider before, AND I can pay cash for it as it's less expensive! I'll need to borrow some money from the husband to buy it, but I can swing it. So, it just worked out and was a win-win all around.

Not to sound like a naysayer, but just to share my experience... I tested in an automatic 4 years ago, and have zero regrets about getting an automatic license. Manual wasn't for me, period. I've never had an issue finding automatic cars over here! Check out Autotrader, Motors.co.uk.

Ditto on paying cash if you can. I'm in a similar situation, in that I'm waiting for my ILR to be approved. It doesn't look like that's happening anytime soon though, and I really need a new car. Meanwhile, my bank can't approve my loan without ILR- I explained the situation, but unfortunately they didn't make any exceptions for Covid and extended visa wait times...

Admittedly, I'm a brand snob and strongly preferred Toyotas or Hondas. But, I expanded my search and found a car that I didn't really consider before, AND I can pay cash for it as it's less expensive! I'll need to borrow some money from the husband to buy it, but I can swing it. So, it just worked out and was a win-win all around.

Not to sound like a naysayer, but just to share my experience... I tested in an automatic 4 years ago, and have zero regrets about getting an automatic license. Manual wasn't for me, period. I've never had an issue finding automatic cars over here! Check out Autotrader, Motors.co.uk.

I genuinely do not understand why people push someone to get a manual license if they aren’t comfortable.  It’s easy to find automatics, as it’s becoming much more popular to drive an automatic. And if it keeps stress away from someone....  I’m glad you stuck to your guns and went auto!

I genuinely do not understand why people push someone to get a manual license if they aren’t comfortable.  It’s easy to find automatics, as it’s becoming much more popular to drive an automatic. And if it keeps stress away from someone....  I’m glad you stuck to your guns and went auto!

Right?! It's really not an issue. Even 4 years ago, my driving instructor said he'd seen an increased demand for automatic lessons. It's made me chuckle before when people have been like "Oh, you have an automatic license, so you can't drive manuals at all." Um... I had no intention of driving a manual car anyways lol.
My husband also drives an automatic car. He didn't go out looking for an automatic, but he found this amazing car that just happened to be an automatic. I guess we're an auto family- quite a change from his initial disappointment at my refusal to go manual 😊

Right?! It's really not an issue. Even 4 years ago, my driving instructor said he'd seen an increased demand for automatic lessons. It's made me chuckle before when people have been like "Oh, you have an automatic license, so you can't drive manuals at all." Um... I had no intention of driving a manual car anyways lol.
My husband also drives an automatic car. He didn't go out looking for an automatic, but he found this amazing car that just happened to be an automatic. I guess we're an auto family- quite a change from his initial disappointment at my refusal to go manual 😊

My husband and I both have full licenses but have automatics.  Same with my in-laws, both have automatics.  It’s really no big deal!