Loan for a new (well not new) car, bad idea?

[jamief]

I own a Civic Type-R GT. The GT (afaik) has aircon, foglights, cruise control etc.

 

[Pulsar_GTI]

mglover070588 Just £5000 can get you something a lot bigger, faster, newer than your '01 corsa

Do you really need to spend 10k?

Just an idea

^ true and you will have loads of extra money to play with - 6k got me a 03 impreza wrx remapped to 270bhp with 17k on the clock

 

[K1LLSW1TCH]

See what the manufacturer offers you loans wise and then go to the bank, you could compare the two and see which is the better deal. I once borrowed £3000 to buy my first car, A shiny red Hyundai Getz. Loan was from the bank of Scotland, Looking back I probably could have got a better deal from my bank but hey, I'm young, and young people make silly errors

Once you've sorted out a loan though you can then go and buy a spanking new Fiat 500 Abarth Well, it's what I would do anyways

 

[widdyst]

Hm I honestly dont see how getting some sort of finance to fund a car could be viewed as a BAD thing. I for one have never had enough ready cash to blow it on a car. Dont get me wrong I would love to be able to buy all my cars cash but unfortunately in the real world not many people are able to do that are they ?????.
As far as bank loans being better value .........not always. My current car is financed with ford at a excellent rate of 4.9%. Now I am pretty confident you wont find a bank loan to match that.

 

[IAmATeaf]

For me personally I'd never take out a loan to get a car but that's just me.

If you do get a loan make sure you think about the worst case scenario, I know that you've got some secure income but it's never really secure unless you've got the cash in your hands in which case you wouldn't need a loan.

 

[[DOD]Asprilla]

Just because you've got the cash it doesn't mean that you shouldn't get a loan. My car was funded by half loan and half cash. I could have paid the lot in cash, but I prefer to keep a lump sum 'just in case'.

For those of you who will never get a load for a car, or get it on finance, what cars do you expect to get for cash as you get older and have families, or your families grow if you are only going to pay cash?

 

[olv]

My current car is financed with ford at a excellent rate of 4.9%. Now I am pretty confident you wont find a bank loan to match that.

Is that flat rate or APR?

 

[Dr Jack]

I don't see why people have this opinion - the only reason not to is if you don't see your income as certain.

Or you want the flexibility to change things later; or you find yourself needing more money for other things. Savings increase your options; loans decrease them.

I agree that you shouldn't overstretch yourself, but putting £250-300 towards a loan is no different to putting £250-300 towards savings, except you get the car sooner rather than later.

Er, no. You get interest on savings; you pay interest on a loan. So over time you're better off to the tune of the interest you saved + the interest you earnt.

 

[ironman]

I advise against it; in general I think a better way of dealing with your finances is to save for things you want. However, if it's how you want to spend your money that way; well, it's not the smartest move you can make but it's hardly terrible.

So you would save when you go to buy a house? Financing is actually a very clever way of managing your money for not much additional cost. Saving and then off loading in one shot is not the most efficient way to work your money.

 

[widdyst]

Is that flat rate or APR?

Its apr . show me a loan deal or finance advertised for the general public that isnt done on apr

 

[chaparral]

Keep an eye out for any brandnew cars with 0% interest rates..

Bought my bike last year when they were doing 0% over 1year,2% over 2years,4% over 3 years....
Bike cost was £7150
I payed £3650 cash
and loan over 2 years for £3500 at 2% APR
plus £350 cashback deal

 

[Hatter The Mad]

I also do not understand the allergy to credit here. It is how life works. Our economy is built and could not function without credit.

What is wrong is if you misuse credit - taking out credit you cannot afford, without planning, without thinking.

Take an example - If I wanted a new £30k car, and I could afford to buy that car in cash, I might still take some credit. Why? Because, perhaps the price of taking out the credit is equal to the value of having access to that cash during the time I pay off the car.

There are lots of things to consider. Most people here who do have a credit allergy here have either read too many James posts (£100k Clio from Carcraft) or haven't really experienced the real world enough.

 

[monkeyspank]

£10K is a big step up from an old corsa!
Getting a loan for a new car is not a bad idea essentially, but some middle ground would be wiser IMO. Have a look what you can get for 4-5K!

 

[leaskovski]

May I ask why you suggest this?

Do you think I am going to go out and park all the new power i have into someone else?

0% deal maybe an option, but I dont like the idea of paying for a brand new car and then seeing it shred money like there is no tomorrow.

 

[olv]

Its apr . show me a loan deal or finance advertised for the general public that isnt done on apr

It's a typical dealer ploy to lure customers in by quoting a low flat rate so it appears that they are getting a better deal than they are.

 

[Dr Jack]

So you would save when you go to buy a house? Financing is actually a very clever way of managing your money for not much additional cost. Saving and then off loading in one shot is not the most efficient way to work your money.

Houses are fundamentally different from cars - they go up in value not down. You're comparing applies to oranges.

 

[[DOD]Asprilla]

Houses are fundamentally different from cars - they go up in value not down.

You mean the can go up in value, given the current climate that isn't always the case. However, I fail to see why the future value is important.

I buy a house because it meets my requirements; I buy a car because it meets my requirements. If affordable credit is part of satisfying those requirements then so be it.

I refer to my original point about changing requirements, such as a family.

 

[Crizzy]

The way I see it there is nothing wrong with borrowing money to help buy a car as long as you can comfortably afford the repayments with no adverse effects on your lifestyle.

You also have to factor in costs that are not included in the repayments such as tax, mot, insurance, service costs and potential repair costs.

I would never borrow money for longer than a 3 year period and as already stated shop around to get the best deal.

And as for choosing what car you want, what do you want from a car? Do you do much mileage?

 

[ironman]

Houses are fundamentally different from cars - they go up in value not down. You're comparing applies to oranges.

The principle is the same, you are taking a loan out to buy something which would otherwise require some time to purchase through saving and buying outright. They are not apples and oranges in that respect, or even over the last 18 months considering both were depreciating assets!

You don't take out a mortgage because the house may increase in value, you do it because its something you may need NOW. If you are financially stable, then why wait 6 months for a car when you can have it now?

 

[Dr Jack]

If you are financially stable, then why wait 6 months for a car when you can have it now?

If that's what you want to do, sure, do it. But don't pretend it's the wise option.