how much to borrow? are car loans a good idea

smartypants

hi,

was thinking of getting a decent car for about 20k, am i mad getting a car loan for this amount? do many of yis have a loan for this amount?

Volvoboy

You can get a decent car for sub €5k tbh i wouldnt be too mad on getting loans out you'll be paying the intrest off long after the car. i'm driving a €400 car everyday not a problem to it, all depends on what you want from a car.



-VB-

smartypants

i want something with abit of comfort ya know, 1.6 -1.4 low mileage etx not sure how much to borrow or what to get , was thinking VW golf, seat leon..

Hotwheels

Car loans are fine so long as you get the right one, stay away from garage finance, lease deals etc. if you are on good terms with your friendly bank manager you can get a personal loan at a good rate. or you can try the credit union, they are very competitive as well...

20K would be about average for a loan if buying new(ish), but make sure you factor in running costs/servicing as well...shop around for the best deal

Good luck with it....:)

smartypants

i was thinking a bmw but id imagine parts are expensive so ill stay clear

Volvoboy

All i know is i wouldnt be hopping into a 20K loan, but i wish ya luck with whatever you find:)




-VB-

andrew1977

smartypants wrote:

hi,

was thinking of getting a decent car for about 20k, am i mad getting a car loan for this amount? do many of yis have a loan for this amount?

Whatever way you finance the car do not take out the finance they garage are offering, no matter how good it sounds at the time !!
Banks are becoming more competitive with each other for bank loans , for me i always use my local credit union for a loan, reasonable interest rates repayment and possibly give you a bit of leeway if you run into trouble paying back the loan,they seem a bit more understanding and helpful, thats my experience of them anyway

peasant

My personal opinion :

A car is not an investment. It loses value the minute you turn the key for the first time and continues losing thereafter.
It costs a fair amount of money to keep it going (even if nothing goes wrong with it), so all in all, running a car is a very expensive affair.

Why anyone would want to throw good money after bad in interest and finance charges is beyond me. I've never bought a car that I couldn't pay for outright. (Needless to say, I hardly ever drove anything that other people might consider "decent" ...but I have no debts either )

quarryman

figure out how much you would be willing to pay per month on owning the car. Multiply this by 36 or 60, depending on how long you want the loan for (3 or 5 years) and that should be roughly your budget.

You'll need to factor in interest and running costs.

I like to keep repayments under 300 pm.

FX Meister

Any loan I've ever had for a car I made sure I paid back a lot each month to get it paid back as soon as possible to avoid interest. I also don't like debt

smartypants

ok well 500 over 4 years would be about 1/5 of my monthly pay, am i willing to pay that? ... would anyone spend 1/5 of their monthly pay on a car loan

Guy:Incognito

peasant wrote:

Why anyone would want to throw good money after bad in interest and finance charges is beyond me. I've never bought a car that I couldn't pay for outright. (Needless to say, I hardly ever drove anything that other people might consider "decent" ...but I have no debts either )

Assumeing you dont earn thousands a week, I'm guessign you had to save for the cars. This is just doing it the other way round, so naturally you'd have to pay for the privilage.



There are plenty of people who see no problem going out every friday night and spending upwards of €100 , that'd buy a pretty nice car for someone who would prefer a car. Over 5 years your looking at €25,000. Plenty of people spendign that on cars.

Dwilly

Not sure where you're based but Appleyard Motors have an affordability calc on their home page, so you can enter your monthly budget and see what cars they have to match - they're doing Seat now too.
http://www.appleyard.net

MAYPOP

smartypants wrote:

ok well 500 over 4 years would be about 1/5 of my monthly pay, am i willing to pay that? ... would anyone spend 1/5 of their monthly pay on a car loan

Do you have a mortgage/heroin addiction/wife + 8 kids/etc. to pay for as well?
You need to aquire some basic budgeting skills before taking this any further IMO.

maidhc

smartypants wrote:

ok well 500 over 4 years would be about 1/5 of my monthly pay, am i willing to pay that? ... would anyone spend 1/5 of their monthly pay on a car loan

Nope. One thing I would never get is a car loan for the reasons peasant mentioned.

Buy a car you can afford. There are plenty of fresh cars in the sub €5k bracket to choose from that will be just as comfortable as a 20k car. If you are willing to spend a bit extra on fuel then you will get a fantastic 2.0 car for that money.

Guy:Incognito

maidhc wrote:

Nope. One thing I would never get is a car loan for the reasons peasant mentioned.

Buy a car you can afford. There are plenty of fresh cars in the sub €5k bracket to choose from that will be just as comfortable as a 20k car. If you are willing to spend a bit extra on fuel then you will get a fantastic 2.0 car for that money.

Thats the thing though, you can afford a 20k , in one of two ways, save your available money until you have 20k to spend, or borrow 20k now and use the money you would have saved anyway to buy your car now. The only difference is you pay the interest.

I mean why do people get mortgages instead of staying at home for 20 years and saving to buy their houses outright.

rowanh

I would not get a car loan inless i was in a situation where i needed it. The car i have now cost 4k as did my previous car and hte one before that. I have never really had any problems with any cars i have owned other than minor thingws for passing nct, though my nct is tommorow on my car, eek! Id happily spend 20k on a car but only if i had it. If i were you id figure out what exactly it is you want from your car like comfort, power, reiability, looks, handling, effiency, size etc then find the best car for what you want in the price range you can afford and work your way up to a car costing 20k

galah

by the way, if you can, get a personal loan instead of a car loan (the banks, at least AIB, distinguish between the two!) - they wanted to charge me a 65 Euro "document transfer fee" on top of the car loan - basically just to send ownership documents from the dealer to me, or something to that effect (I was pretty annoyed at the time and didn't listen properly). Expensive stamp, in my opinion.

No fee for the personal loan (unless you tell them you want it for car, then they'll "switch" you to a car loan...)

Just a word of warning...

Gatster

Originally Posted by Stekelly
Assumeing you dont earn thousands a week, I'm guessign you had to save for the cars. This is just doing it the other way round, so naturally you'd have to pay for the privilage.

That's pretty much what I think - I've got a (personal) loan for my car, I can afford the payments and running costs and the pleasure I get from motors as my main hobby is justification for the (quite low) interest I pay. I've been lucky and managed to make money on 3 from my 4 recent cars so effectively the loan keeps going down and the cars get more expensive.

You can get an absolutely fine car for €5k, there is nothing wrong with that, just as there is nothing wrong in the OP wanting to get a loan to get something more recent or better.

Horses for courses I guess...:)

rebel.ranter

I would make sure you can afford the paymetns by doing out your budget. In your budget don't forget to factor in your tax, insurance, fuel, servicing, tyres as well as your loan repayments in addition to your normal outgoings (rent/mortgage, food , etc.).

After that then see if you still really want the car! For me my cars are my hobby as well as a mode of transport. Some people like drink excessively on a Friday/Saturday night, or spend all their money on DIY, or maybe going on holidays. I like to spend my money on the car. I get enjoyment from it.

You only live once so make the most of it!
(But be sensible!:eek: )

Darando

First off - just make sure you can afford it - thats the main rule.

I think Tesco have the best rate at the moment - 6.9% APR Fixed , meaning you will know exactly how much you will have to pay back - it will never change. Ring around and get an idea (try get a fixed as it will never changed compared to variable which will be interest rate linked)

As mentioned finance from gargaes are very poor value - plus they are mostly hire purchase meaning you don't own the car until teh final payment is made (a problem if you default!!)