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Any benifit to taking out a car loan?

  • 25-10-2012 7:57pm
    #1
    mp3ireland2
    Registered Users, Registered Users 2 Posts: 1,836 ✭✭✭


    Hi,
    I'm thinking of getting a car in about 6 months time.... Don't have a lot of money at the minute due to travel debt etc. I've about 5.5K saved at the min and reckon i'll have about 9.5K saved and would be looking to buy a car for maybe 6K.

    Is there any benifit to taking out a loan rather than spend my savings? I'll have a few grand left over and am working in a very steady job, have no fear of loosing it or anything, no house, no kids or anything.

    Just wondering from a credit history point of view if I go to get a mortgage in a few years time does it look better to have had a loan previsouly? (took out a loan for my current car but paid the loan off within a month as I got a cheaper car than I expected, so technically that could count as a loan).

    So to summarise not worried about an emergency where i'd need the cash, just wondering does it look better to take out a loan and pay it off. Don't know much about finance stuff so apologies if it's a stupid question!


Comments

  • #2
    okiss
    Registered Users, Registered Users 2 Posts: 699 ✭✭✭okiss


    If you have the cash to buy a car I would not take out a loan.
    Ask yourself do you need a car as in the next few months you hope to have €9.5k saved. If you keep saving you could own your own home quicker or you could have a bigger deposit saved which would help you get a mortgage.
    If you are looking at getting a mortgage I would do the following:
    1. Get a credit card with a €750 limit and pay off any balance in full each month
    2. Don't use internet gambling sites
    3. Use the nca.ie website to do out a budget and then put what you can save each month into a regular savings account with a decent interest rate.
    4. Get a utility bill in your name
    5. Save and have 6 months salary in an instant access account - NationwideUk Ireland ( nationwideuk.ie have an account which pays interest monthly and you need €2000 to open this account. This account need to be seperate from your mortgage savings account as you may need this money later at short notice.
    6. Don't have an overdraft on you bank account - the bank will look at an overdraft on a bank account to see if you are od each month.
    7. Keep all utility bills, any info/forms/statements from the tax office, bank statements for current and savings account for the next few years. When your applying for a mortgage the bank will ask for these. You will need to show your deposit was saved and you did not borrow money for this.


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