Trapped: Needing to Replace Your Car but Lacking the Finance to Do It

While my ten year old car runs fine and doesn't have excess mileage, I am well aware that by the time it's road test is due (all cars over 2 years old must pass the MOT test in the UK) in August, it may well need 4 new tyres.

Additionally, since it didn't need any work doing on it the last 2 years, something else is almost certainly going to have to be fixed/replaced, and therefore I could end up paying as much as the car is worth just to keep it on the road.

My best option would be to trade the car in with a dealer now, since although I might not get as high a price for it from a dealer as selling it privately, this would save me from having to have road tax and insurance for 2 cars as well as eliminating the worry of having to sell the car.

My problem is finding the money to buy another car, and I am sure that I am not alone in being in this situation, having limited cash or savings, and as I found out when I went to my bank on Saturday morning, unable to get a loan to cover the shortfall.

So here I am, caught between a rock and a hard place, and not knowing what to do.

Why am I unable to get financing?

Unfortunately, I only moved back to the UK from Florida 2 ½ years ago, and although I have had a good job for the last 2 years, it doesn't pay that much, and as I am divorced with 2 daughters living in Florida, my child support payment takes a 45% chunk out of the money that I bring home every month.

With limited cash available after this is deducted, then my housing costs and utility bills, the bank does not feel that I have enough money left to be considered for a loan.

I could find the money, but…

If I clean out my savings account, my Paypal account, and the savings that I have accrued for my daughters for when they turn 18, I can just about find enough money to buy another car.

The good thing is that if I do this, I will not have to take out a loan and to pay the additional cost associated with this.

The bad thing is that I will then have no money to use to purchase flights to go to Florida in the summer so that I can see my daughters, and this is the only time of the year that I can see them. I really don't want to miss seeing them, and I really don't want to take the money out of their account either, even though this would be temporary.

What are my options?

Basically I am faced with 2 options:

Wait until summer and hope that the car passes it's test ok. If it doesn't worry about it then, but it may mean having to pay out more than the car is worth just to be able to drive it again, or to sell it for scrap when there might be little wrong with it, but I can't justify paying to get it fixed.

Scrape together the money now and buy another car, and worry about the money for the flights later.

You might be thinking that I could look at cheaper cars, and I have done this, however if I choose a cheaper car, almost certainly I will get little money trading my old one in.

I am definitely caught between a rock and a hard place, but hoping that I win the lottery (a few thousand would do) or that there is another option that I haven't thought of.

So what do you think?

Have you been in or are you in a similar financial situation?

If so, how are you handling this dilemma and finding the best solution.