Whats the percentage of your Car repayment from your disposable income?

oxygen_old

Hey, Im asking this here, since its about more than just money.

I test drove a Mazda3 hatch, and liked. Its a good deal, €8,750 for a '06 with 22k miles on the clock.

I put a €200 deposit down, and left them to sort out finance.
I wanted a 4 or 5 yr loan, but they told me yesterday that all they could get is a 3 year loan.
This brings the payments to %25 of my disposable income.
Thats after mortgage, commuting expenses(train) etc.

Whats yer car repayments precentage like? think thats too much? cause the other option is to buy a but ugly car for 2K.

ntlbell

how about going to your own bank?

Henry Ford III

0%

Stevie Dakota

Henry Ford III wrote: »

0%

+1 I used that Celtic Tiger to get OUT of debt!

fletch

0% for me too

eringobragh

Is finance not for mugs or am I imagining things?

It would probably work out better and cheaper to go the credit union/building society/bank loan!

0% as well (cars not worth much!)

Kafer

8750 is good value but not when you have to get a loan to buy it.

I agree with the lads. Buy something that you have the cash for and build up your savings. That 8750K will be costing you 11K by the time you have it paid back and the car will be worth 3K.

oxygen_old

Financing is just the dealer sorting out the loan for you I think. Its in their interest to get you the money.

I went to my own bank, they said it was a bit tight.
%60 of car loans are being refused these days.

Thanks for all the 0% guys. I pressume then, a fair amount of cash most people would be able to gather would be between €1,500 and €2,000. So not to go any higher than that. That right? When I started seeing all the replies with just %0 in them, that what Im assuming ye meant, the replies were a little vague.

oxygen_old

Kafer wrote: »

8750 is good value but not when you have to get a loan to buy it.

I agree with the lads. Buy something that you have the cash for and build up your savings. That 8750K will be costing you 11K by the time you have it paid back and the car will be worth 3K.

Thanks for that Kafer. When I asked him the cost of finance yesterday, he didnt know. Ill call him today and get him to check. Ill consider the cost onto the price of the car.

dudara

Paid cash for my last car - I've already got a loan from my postgrad days that I'm paying back that is 11% of my monthly income plus I save 20% - so I wanted to no further debt.

Eoin

oxygen wrote: »

I test drove a Mazda3 hatch, and liked. Its a good deal, €8,750 for a '06 with 22k miles on the clock.
...
I wanted a 4 or 5 yr loan, but they told me yesterday that all they could get is a 3 year loan.
This brings the payments to %25 of my disposable income.
...
cause the other option is to buy a but ugly car for 2K.

So why not get a loan for 5/6K over 3 years - why the jump from nearly 9K to 2K?

robtri

I never take a loan out for a car, only buy what I can afford....

probably explains why I drive old bangers....

For example
I would rather buy a car for 3k keep it fro 3 years sell it for 1K....
so it only costs me 2K over three years...
than buy a car for 10K pay back 13k over three years and sell it for 5k...
that would cost me 8K over 3 years.....

Gregor Samsa

I had to get a loan (10 grand) a few years ago, but not for a car. It was over 5 years, but I paid it off after just over 2 years - I hated having it, even though I could afford it. Since then, I've been putting the same amount of money I used to pay off the loan with into a savings account each month.

Personally, I'd never get another loan again (mortgage excepted) unless I absolutely had to (something like medical or legal fees). But maybe that's just me.

Any car I've bought so far has been for my own cash, so it's 0% for me too.

OP, i suppose it depends on your job, but with the way things are going at the moment, I wouldn't be putting 25% of my disposable income into a loan. With tax increases and benefit decreases in the next budget, that could easily become 35% - assuming your job is still around then.

While things are good at the moment, interest rates are only going to go one way (up) over the next 3 years - if it's a fixed rate, that won't matter, but keep it in mind if it's variable.

EDIT: is the 200 deposit the only cash you're planning to put towards the car, or is it just to put your stake on it?

As for getting a butt ugly car for 2K - there's lots of nice cars you could get for that money, and then save what you would have put into the loan for 3 years and get something even better with the cash then.

oxygen_old

Thanks for the reply guys. I was kinda on the fence about it myself, think yere right.

A quater of my displosable would be putting me under a fair bit of pressure for a car I drive mostly at weekends.Think I'll start looking for something a bit more in my price range.

eringobragh

oxygen wrote: »

Thanks for the reply guys. I was kinda on the fence about it myself, think yere right.

A quater of my displosable would be putting me under a fair bit of pressure for a car I drive mostly at weekends.Think I'll start looking for something a bit more in my price range.

I've seen loads of keenly priced cars on www.adverts.ie in recent times!

Berty

Car Cost €0
Tax €0
Insurance €0
Servicing €0
Tyres €0
Bodywork €0
Fuel €0

Grand Total €0

= Company car and I DO NOT PAY BIK -

Cookie_Monster

0% now but i was putting about 28% of my income into the loan when I had it. All gone in 17 months as a result.

I would never get a car loan, just get a personnal loan. rates are usually better.

Anan1

0%, financing a car makes about as much sense to me as financing an ice cream cone.

smcgiff

Berty wrote: »

Car Cost €0
Tax €0
Insurance €0
Servicing €0
Tyres €0
Bodywork €0
Fuel €0

Grand Total €0

= Company car and I DO NOT PAY BIK -

How do you get from work to home and vice versa?

smcgiff

Okay - Guilty. 15% of Net of tax (too lazy to work out NDI).

I can't be the only one though

Anan1

I dont think 25% of disposable income is bad at all. I would have no problem spending a lot of my disposable income on a car loan. Plenty of people would be spending 25% of their whole income on a car

Its ok for the people who buy a 3k car in cash to say they would not get a car loan but if you want to go out and spend 30 of 40k on a car its hardly an option. I dont have a loan at the moment but wouldnt think twice about getting one to buy a car I wanted. Im not a fan of buying a banger and running it into the ground.

Anan1 wrote: »

0%, financing a car makes about as much sense to me as financing an ice cream cone.

There would be very few expensive cars on the road if everybody had this opinion. I dont see the problem with getting a car loan to buy a car you want. If you want the car its hardly a waste of money.

Im talking about car loans btw not financing through the dealer.

Nforce

0% for me too...I've only ever bought a car based on whether or not I could pay cash up front. I'm not a big fan of loans either and am lucky in that the only loan I have is my mortgage.

Eoin

I have a car loan as well - don't know the exact percentage, but I think it's less than 5% of my take home.

This comes up a good bit, and you'll always have the people who trot out the totalities about how it doesn't make financial sense.

But a lot of these people drive cars that depreciate a lot and/or have high tax and running costs. So really it's just a case of choosing in what way your car is going to lose your money for you.

Nforce

Anahi Panicky Stalemate wrote: »

Its ok for the people who buy a 3k car in cash to say they would not get a car loan but if you want to go out and spend 30 of 40k on a car its hardly an option.

Anahi Panicky Stalemate wrote: »

Im not a fan of buying a banger and running it into the ground.

Anahi Panicky Stalemate wrote: »

There would be very few expensive cars on the road if everybody had this opinion. I dont see the problem with getting a car loan to buy a car you want. If you want the car its hardly a waste of money.

This is the very reason as to why the repo companies are so busy at the minute.

Anan1

Anahi Panicky Stalemate wrote: »

There would be very few expensive cars on the road if everybody had this opinion. I dont see the problem with getting a car loan to buy a car you want. If you want the car its hardly a waste of money.

Im talking about car loans btw not financing through the dealer.

It's a matter of personal opinion, really. Mine is that if I can't pay cash for a car then I can't afford it. I think this is particularly true in the current market, where cars are so cheap to buy and depreciate so much.

lafors

I've a company car so pay BIK.
Going back this month so I'll be buying my own based upon the car allowance they'll be giving me instead. Only problem with that is that I'd have to stay employed or I'll have to pay it myself, so I'm deciding on exactly how much I'm willing to take out a loan for too.

These threads are always the same, lads can't post quickly enough how great it is they have 0%. People like Kafer & Robtri give good replies, and all most of the rest of you have done is make people who have finance not post for fear of looking like a twat for owing money on a car. I'd say I know more people who borrow for their cars than people who don't.

irisheddie85

i pay about 15% of dispoasble income on car repaymemts. got a credit union loan so some months a bit more some a bit less without any penalty. Paid off my last 5 year car loan in 2 1/2 years this way hope to do the same this time

Nforce

Nforce wrote: »

This is the very reason as to why the repo companies are so busy at the minute.

I am not saying someone should go out and get themselves into a situation where they borrow more than they can afford to repay.

But if someone wants to go out and buy a car they want, which they cannot pay for in cash and never could but could easily afford the repayments over a few years I dont see the problem.

Anan1 wrote: »

It's a matter of personal opinion, really. Mine is that if I can't pay cash for a car then I can't afford it. I think this is particularly true in the current market, where cars are so cheap to buy and depreciate so much.

I would just feel I would be missing out on being able to buy so many different cars if I limited myself to paying in cash.

Nforce

Anan1 wrote: »

It's a matter of personal opinion, really. Mine is that if I can't pay cash for a car then I can't afford it. I think this is particularly true in the current market, where cars are so cheap to buy and depreciate so much.

Yep,totally agree. And for what it's worth...paying cash for a car doesn't necessarily mean it'll be a couple of grand for a banger. I paid over €20k of my hard earned cash for my last car....saved for it like a bastid as I really wanted that car and had a goal of buying it without having to go into debt in order to get it. It'll be the same for my next car.

bazz26

0% for me too. But when I was younger and foolish I financed a car, paid it off over the agreed term but never again. These days luckily I buy with my own money or not at all.

Nforce

Anahi Panicky Stalemate wrote: »

I am not saying someone should go out and get themselves into a situation where they borrow more than they can afford to repay.

But if someone wants to go out and buy a car they want, which they cannot pay for in cash and never could but could easily afford the repayments over a few years I dont see the problem.

The problem is that many people have borrowed more than they could pay back......the proof of this is in Merlin auctions! It's the "keeping up with the Jone's" syndrome....people were buying cars that they couldn't afford, building houses they can't afford to heat...nor make repayments, taking 3 or 4 expensive holidays a year ............the recession has put paid to all of that for these gobshytes.;)

ntlbell

Anahi Panicky Stalemate wrote: »

But if someone wants to go out and buy a car they want, which they cannot pay for in cash and never could but could easily afford the repayments over a few years I dont see the problem..

That doesn't make much sense, if they can afford to pay a few k more than the cars worth over x amount of years then surely they can afford to drive a different car for x amount of years that hey can afford to buy in cash and save for the next car buy it outright and not pay the bank a few k for the pleasure?

the issue is are you a 12yr old child who "NEEDS IT NOW!!!" or are you an adult who can hold out and wait.

the majority fall into the former with the need for instant gratification that the blessings of our high flying economy has brought us.

R.O.R

I have a bank loan for my car, and the wife's is on Finance. Haven't a clue what % of take home pay they come out to though.

For the past few years I've essentially made my living from people financing cars - if it wasn't a viable option then none of the major companies around the world would be doing it, but that's another discussion.

Eoin

Of course getting a loan you can't afford is stupid. That doesn't mean that getting a loan itself is stupid. Yes, you pay more in interest but some people who paid cash for their car pay far more in deprecation or fuel. What makes them any cleverer? This really seems like a bit of a smugfest.

ntlbell

eoin wrote: »

Of course getting a loan you can't afford is stupid. That doesn't mean that getting a loan itself is stupid. Yes, you pay more in interest but some people who paid cash for their car pay far more in deprecation or fuel. What makes them any cleverer? This really seems like a bit of a smugfest.

does getting the loan stop deprecation of a car?

quarryman

lafors wrote: »

These threads are always the same, lads can't post quickly enough how great it is they have 0%. People like Kafer & Robtri give good replies, and all most of the rest of you have done is make people who have finance not post for fear of looking like a twat for owing money on a car. I'd say I know more people who borrow for their cars than people who don't.

+1

Nforce

eoin wrote: »

Of course getting a loan you can't afford is stupid. That doesn't mean that getting a loan itself is stupid. Yes, you pay more in interest but some people who paid cash for their car pay far more in deprecation or fuel. What makes them any cleverer? This really seems like a bit of a smugfest.

and people who finance their cars don't suffer the ravages of depreciation and fuel costs?

Eoin

ntlbell wrote: »

does getting the loan stop deprecation of a car?

Nforce wrote:

and people who finance their cars don't suffer the ravages of depreciation and fuel costs?

That wasn't what I was saying.

My point is that unless you buy an econo-box for a couple of grand, then there will always be an element of unnecessary cost attached to the car. That might be in running costs, tax, insurance or the cost of financing it.

What makes the person paying €1500 a year in tax and the same again on petrol more financially savvy than the person who got a small loan for a car that doesn't have the same running costs.

Anan1

eoin wrote: »

Of course getting a loan you can't afford is stupid. That doesn't mean that getting a loan itself is stupid. Yes, you pay more in interest but some people who paid cash for their car pay far more in deprecation or fuel. What makes them any cleverer? This really seems like a bit of a smugfest.

Hey, it's only a personal opinion.;) The way I see it is that any car costing more than say €3k is an indulgence for me, the same as going to a nice restaurant or on an expensive holiday. I'm all in favour of borrowing for investment, but not for something the value of which is on a sharp, one-way trip down. I've no problem with other people doing whatever they want with their own money, that's just how I see it. For me. K?:D

ntlbell

eoin wrote: »

That wasn't what I was saying.

My point is that unless you buy an econo-box for a couple of grand, then there will always be an element of unnecessary cost attached to the car. That might be in running costs, tax, insurance or the cost of financing it.

What makes the person paying €1500 a year in tax and the same again on petrol more financially savvy than the person who got a small loan for a car that doesn't have the same running costs.

but you're assuming that people who do get the loan don't have the above payment's a lot do on top of the huge interest rates.

If there's always an element of unnecessary cost then it doesn't make sense to go and add more?

everyone in Ireland has to get insurance, everyone has to tax the car, everyone has to put petrol on it.

none of your points are exclusive to car finance or buying straight so pretty irrelevant.

Gregor Samsa

lafors wrote: »

People like Kafer & Robtri give good replies, and all most of the rest of you have done is make people who have finance not post for fear of looking like a twat for owing money on a car.

I think you're being a bit sensitive. The OP asked for people's opinions and what percentage of their DI they themselves were paying. What do you expect the people who didn't finance their cars to do? Not post their opinions for fear of offending someone who did? No one is out to make anyone look a twat - it's just a fact that some people choose not to borrow money for very good reasons, and since the OP was specifically asking for opinion on this, I don't see any problem with any of the replies.

That said, if anyone can afford to, or is willing to make the sacrifice, then I don't see a problem with borrrowing at all. I just suspect that since the OP is posting here about it, then maybe they can't comfortably afford it.

smcgiff

I think there are two types of car owner - one that views a car as a necessity to get from A to B, and another that have cars as a hobby -even a passion.

For example there might be some that would never go into debt to purchase a car, but would have no problem peeing their hard earned readies down the drain of the local pub.

Not to be disrespectful, but if you have a few thousand in cash and are willing only to spend up to that amount I cant really see that person being a petrolhead.

ntlbell

ntlbell wrote: »

That doesn't make much sense, if they can afford to pay a few k more than the cars worth over x amount of years then surely they can afford to drive a different car for x amount of years that hey can afford to buy in cash and save for the next car buy it outright and not pay the bank a few k for the pleasure?

the issue is are you a 12yr old child who "NEEDS IT NOW!!!" or are you an adult who can hold out and wait.

the majority fall into the former with the need for instant gratification that the blessings of our high flying economy has brought us.

Life is too short to spend years saving for something like a car. When you eventually have the money saved then the car is years older etc etc.

I know very few people who dont have car loans and I dont see any of them struggling to make repayments. The loans would all be around 15 to 20k.

By all means save up a some of cash say up to 1/3 of the price of a car but in all honesty so you think there would be many cars on the road worth over 30k without car loans. Then these cars would never be in it for people to buy for a couple of k in cash when they are older.

I think it limits you from so many great cars by not using car loans.

smcgiff wrote: »

Not to be disrespectful, but if you have a few thousand in cash and are willing only to spend up to that amount I cant really see that person being a petrolhead.

+1

Eoin

ntlbell wrote: »

but you're assuming that people who do get the loan don't have the above payment's a lot do on top of the huge interest rates.

No, I'm not assuming that.

The point I am trying to make - apparently quite poorly - is that most people spend more money on their car than is necessary. That might be in one or many ways; finance / tax / insurance / petrol / maintenance etc - quite possibly all of these.

On the AIB site, a car loan for 6000 over 3 years costs €194.70 a month. That's a cost of credit of about €1010 - maybe a bit more if you factor in any fees.

The cost of taxing a 3 litre car over a 2 litre car is about 600 a year. The cost of insuring it might be a few hundred extra as well.

So one person might pay 6K cash for a 3.0 litre car, but another person might finance a 6K car, but one that doesn't cost as much to tax. And yes - another person might also finance the 3.0 car as well.

The point is that anyone who doesn't buy and run the cheapest possible car is wasting money in some way or the other.

jmck87

Eoin makes a good point.

Nothing wrong with getting a car on finance thats relatively cheap to run, same way as no point boasting being able to pay cash for a 2.5 litre beemer.

So all the 0 percenters that answered....own up what size engine you have

nice_guy80

0%. paid in cash from savings

I save money like a mo-fo

after rent and an old college loans, maybe 15% on loan.. 15% for insurance aswell tho.

Berty

smcgiff wrote: »

How do you get from work to home and vice versa?

In Company Car.

Company pays BIK in the form of refunding me whatever the Government take for whatever given month.

They call it a bonus on my payslip.

Government gets paid but not by me in a roundabout way.

smcgiff

Berty wrote: »

They call it a bonus on my payslip.

Which you pay tax on, no?

Anan1

jmck87 wrote: »

Eoin makes a good point.

Nothing wrong with getting a car on finance thats relatively cheap to run, same way as no point boasting being able to pay cash for a 2.5 litre beemer.

So all the 0 percenters that answered....own up what size engine you have

Boasting?? The OP asked a question and we answered. 2.5 & 3.2, if it matters.

Berty

smcgiff wrote: »

Which you pay tax on, no?

Considerably less than BIK.