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Just Joined

1 Posts

Posted - 13 November 2017 :  18:47:20  Show Profile  Reply with Quote
Hi, I entered a TD (MY husband also) in Nov 2016. We are now a year in and just had our 1st review.

Things have been pretty rough over this year and being in a TD has taken much adjusting to. Our car is over 10 years old and these last 6 months, we have had to find over £1000 for repairs. As a result, our savings for Christmas are pretty shabby.

Two questions really....

Knightsbridge advised I could get a car loan in principle and they would look and decide whether we could afford this. Just wondering if anyone has had to get a loan in a TD for a car and what's best advice?

Also, to meet Christmas demands this year, I have been considering mail order. If i done this, could it affect my TD? TIA.

David Tannock
Trust Deed Expert

2074 Posts

Posted - 14 November 2017 :  08:34:12  Show Profile  Reply with Quote
Hi Mastyk and welcome to the forum.

I think the first issue might be the ability to secure car finance. In my experience itís very difficult for a client who is subject to a Trust Deed to secure any sort of loan or finance. In the small number of cases that Iíve dealt with who have been successful in securing the finance the level of interest that the client would repay is extremely high. One client was looking to purchase a car worth approximately £7,000 and the payment was around £266 per month which they felt was affordable. When we looked at the interest in total they paid back approximately £16,000. More in interest and charges than what the car was worth. If you do think that within your budget you could afford car finance then your best to shop around and be honest and up front with the salesman about your credit history and that it will be pretty poor. If you are able to secure finance then really consider the payment per month and the level of interest you will pay back.

The money which you have put into your car in the last 12 months is this for things that are expensive but will hopefully prolong the life of the car outside of wear and tear problems? Iíve got an older car myself and just spent over £800 on new parts (clutch and timing belt) but these are parts which should prolong the life of the car outside of the usual tyres, brake pads etc. If thatís the case then you might be able to nurse the car through the next couple of years.

In terms of using mail order to cover the cost of Christmas you need to weight up the financial costs that this would have and how it would impact on your budget. Getting into further debt so soon after entering into the Trust Deed should really be avoided at all costs.

If for example you took our car finance at £200 per month then had another £100 per month to pay back in mail order items could your budget sustain an outgoing of £300 per month? If so then the question could be that you could pay more towards your Trust Deed for the benefit of your creditors. You also then have to think about future expenses and costs such as next yearís Christmas and also birthdays. You could very quickly find yourself in another 10-15k of debt and then the possibility of your Trust Deedís failing because of this.

I would take a step back and really look at your budget, could you nurse a car through another 12-18 months or longer and it is possible to have a restricted Christmas this year to ensure that you are financially better going forward.

Recommended Partner & Trust Deed Expert - Ask me for help setting up a Scottish Trust Deed
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