Credit union/ Car insurance.

Velocitee

Hello,

Very quick question(s) - my car insurance is due for renewal (insert appropriate annoying car advert here.)

With my current insurer I did a quick quote and it was around 1300 plus a 19.66% APR if I chose to pay in installments. (1555 if my calculations are right! :eek:)

My insurance is quite high as I made a 50:50 claim in an accident I was involved in 2 years ago.

Anyway I did a search online and got a quote (with the accident accounted for - all above board) for 999.56! This company don't do installments.

My Credit Union is in my hometown so I won't be able to get down for another couple of weeks but last I checked it was a 9.5% APR.

I was thinking of taking a loan from them for the cheaper quote and it would end up costing me 1099.56. (saving me €450) also would not have to put a deposit down.

I have an 5yr 18k car loan that I am 1k ahead on (overpaid for a while to bring the term down and was told the last time I have excellent credit because of this.) I have 2.5 years left on it.

I am not in a position to pay the insurance outright as I have been paying other things off to save money in the long term and my motor tax (550+ euro ) is due next month (I want to pay this all in one lump as I have been doing this in 3 months stages but it's annoying/ more expensive to do so).

I am loathe to take on a car insurance loan but I won't have the amount for when the renewal is due and paying in installments is really the same thing only more expensive.

Was lucky enough to change job so (touch wood) I'll have a bit of extra cash towards the end of the year - just decided to get up and do something about this living month to month malarkey and get savings/ emergency fund going, and have been clearing payments etc in bulk where possible.

Ok now the math is over my questions are

1) provided I get approved for the car insurance loan (which I hope as I will explain to them the APR differences etc.) will this be amalgamated to my current loan or be a separate loan?

2) as I am 1k ahead would they be in a position to give me this back instead of a loan? (reading that back it sounds like a no go!)

3) what would you do?

romah

Long question !! but i will keep the answers short ...

1. You will be given a complete new loan..your existing outstanding loan balance will be topped up by the amount for your car insurance. From your info you will now be looking at approx 9000 euro for your car loan and insurance. Your repayments should be in the region of 350 per month (my guess ...using a loan calculator online !!) for 2 1/2 years.
Don't extend the term of the loan beyond the length of time you expect to keep the car for.

2. right no go .Your payments are ahead...what you are doing is reducing your interest payments as the credit union calculates the interest on the outstanding balance of your loan . The lower the balance the lower the interest.

3. Ring your credit union .. they might take loan application over the phone . you will have to call to them to collect the loan and sign for it etc.. but they might be open on saturdays !!

Also ring the insurance company ..you may get a reduction form the online when you talk to them ..

eimearcmh

1) Your loan will be merged with the previous one IF the interest rate on the car loan is the same as the 9.5% you will be paying for the car insurance. Your probably paying a lower rate for the car loan.

2) No. Being prepaid just gives you an idea of the stauts of your loan. Interest is calculated on the reducing loan balance so the smaller you loan, the smaller the interests repayments will be.

3) Its up to you of course but theres no harm in ringing the Credit Union.