Car Loans

godtabh

Looking to buy a new car this week.

I've spotted a new model C4 (2011) that would meet our needs. Total cost would be approx €17k.

We have a Polo for part exchange and cash bringing down the amount to be borrowed to €6k.

What are the banks like to get loans from? I'm going to AIB today and will ring the credit union shortly. But generally speaking what's it like?

My last car loan was simple and had it paid off in 9 months (€10k on a 05 Saab 93)

richardsheil

Why not buy a car for 11k and not bother with the loan? Loads of lovely cars available.

R.O.R

As long as you have a decent credit history, you should be OK borrowing €6k against a €17k car. Even if you default, the bank aren't going to lose on it.

pred racer

The interest rates at the moment are high on personal loans, 14% fixed with boi for <10k finance is cheaper(sorry dont remember how much)

jameshayes

credit union is yer best bet - 10% flat, as above, banks are charging through the nose for personal loans

jameshayes

jameshayes wrote: »

credit union is yer best bet - 10% flat, as above, banks are charging through the nose for personal loans

Credit union car loan is 7%. If you have savings in the credit union they will give you a better rate, I have a rate of 5.5% on my car loan due to having saving there as well.

dahamsta

Credit unions don't have fixed rates, they're independent of each other and set their own rates as they see fit. I've never come across a CU that gives loans without savings, as they generally have a savings-to-loan ratio. Finally, they're unlikely to give a loan to a new member, you generally need to be a member for a fixed period of time.

bazz26

Brynlee Mammoth Quintet wrote: »

Credit union car loan is 7%. If you have savings in the credit union they will give you a better rate, I have a rate of 5.5% on my car loan due to having saving there as well.

Your savings are more than likely locked in and secured against the loan to get that reduced interest rate. Still better than the banks as long as you don't need to access your savings for the term of the loan.

coylemj

R.O.R wrote: »

As long as you have a decent credit history, you should be OK borrowing €6k against a €17k car. Even if you default, the bank aren't going to lose on it.

I'm thinking that statement is based on the notion that the bank would accept the new car as security which in the current environment I doubt will happen. They have enough enough houses on the books that they can't shift, the last thing they need are secondhand cars.

Your credit history and ability to pay are all that matter for a car loan. The only institutions that I'm aware of who hold title as security are leasing companies and they typically only finance brand new cars and deal with companies and self-employed people.

heate

http://www.citroenoffers.ie/citroen-c4.html


I'd of thought 17k for an 11' C4 is a bit of a rip considering they are advertising a new one at €16k

More haggling to be done OP and ask citroen about financing the €6k you may be surprised how low rates are from dealers these days. The banks are taking the piss with 14% personal loans!

dahamsta

Dunno about dealing with the public, but I leased a used van with BOI Finance a few years ago, no problem. I was probably a sole trader at the time, but I wouldn't swear to it.

Guy:Incognito

richardsheil wrote: »

Why not buy a car for 11k and not bother with the loan? Loads of lovely cars available.

Why not buy one for 2k and spend 9 on coke and hookers? The OP likes the car.

dahamsta

I concur with richardsheil; but hey, if no-one super-depreciated, I wouldn't be driving a lovely barge that super-depreciated by about ten grand a year!

Keep buyin' them new and nearly new cars folks, the economy is a-ok.

unkel

If you have a secure income and can afford the repayments, go ahead and get your loan. Make sure you pay the least interest possible.

Me, I've never had a loan to buy a car. Or anything else really. That massive big loan called a mortgage is more than enough debt I could ever prudently deal with

R.O.R

coylemj wrote: »

I'm thinking that statement is based on the notion that the bank would accept the new car as security which in the current environment I doubt will happen. They have enough enough houses on the books that they can't shift, the last thing they need are secondhand cars.

Your credit history and ability to pay are all that matter for a car loan. The only institutions that I'm aware of who hold title as security are leasing companies and they typically only finance brand new cars and deal with companies and self-employed people.

If you are getting a car loan, it's going to be HP and secured against the car itself, so the bank want to make sure there is adequate value in the car incase you do default. In this case, €6k loan against a €17k is more than adequate, plus there is little chance the OP will invoke the half rule when the time comes.

Credit history and ability to pay are not the be all and end all anymore.

pajo1981

Guy:Incognito wrote: »

Why not buy one for 2k and spend 9 on coke and hookers? The OP likes the car.

Or if you're Ben Dunne, you can get the car and the coke and hookers.

-Ben Dunne

godtabh

heate wrote: »

http://www.citroenoffers.ie/citroen-c4.html


I'd of thought 17k for an 11' C4 is a bit of a rip considering they are advertising a new one at €16k

I saw that yesterday in the paper and will be ringing a main dealer today. The car is actually just a small bit north of €16k and less than 6 months old.

I applied through the CU and AIB. Both loans have been approved in principal and I should find out the CU rate today/tomorrow. I'm more than likely going with the CU and have it paid off within max 12 months min 6 months. I'll pay it off as soon as possible.

godtabh

The same 2012 model is €6k more expensive

ShadowHearth

Whatever you do op, don't throw all of your savings in to the car with nothing left over for "dark day".

When I bough last car I had more then needed to buy it, but I still went to bank for 2k loan. Loan costed me around 200 quid in 2 years, but it gave me a peace of mind, that if something will happen I have spare 2k in account, which gives me flexibility to keep paying the loan and get back on track without selling car etc.

MrDerp

Car Finance on a 6K loan?

I've only banked with AIB, and I'm sure they only finance cars for 10K or more. Any lower and it's just a personal loan. The lower (secured) car finance rates, along with the documentation cost make smaller loans not worth their while.

There's no problem getting personal loans at the moment unless you're up to your neck in credit. After all, personal loans are the only thing banks can make money on right now. Expect to pay 11-12% going down this avenue though.

bazz26

bazz26 wrote: »

Your savings are more than likely locked in and secured against the loan to get that reduced interest rate. Still better than the banks as long as you don't need to access your savings for the term of the loan.

Yeah my saving are locked in but I'm happy enough with that.

godtabh

Its a loan for a car. Call it what you will.

We'll still have rainy day money and should be able to save 2/3 of what we would normally have saved and the final 1/3 to pay off the loan so not bad.

The difference between the CU and AIB is about €700 over 12 months

heate

The OP clearly will have the cash in the next couple of months but wants/needs the car now!
I bought a car about 3 months after moving to Zurich my friends thought I was nuts paying so much money - I had the car paid off by the end of the year when my bonus arrived I luckily had a willing partent who lent me the cash and owned the car within 8 months. Obviously not everyone is in the same position I wasn't eligible for a bank loan and didn't want a piece of crap car.
Financing cars is a perfectly acceptable idea if done correctly!
The friends that were giving out are still throwing out CHF1200 a month on leasing for 48 months!

godtabh

In the past any car loans I have gotten would have a minimum of 50% cash upfront with the remainder loans/trade ins. Always have them paid off within 12 months and would save side by side.

Actual cost of credit is normally less than €500 and I'd look for that in bargaining with the dealer