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Worth getting a loan?

  • 13-10-2015 10:56pm
    #1
    Ave Sodalis
    Registered Users, Registered Users 2 Posts: 7,555 ✭✭✭


    Hi all,

    I've been looking into saving to buy a car. The original plan was to work for a year after college to save up and buy at the end of the year where I would have enough to buy both the car and insurance. However, as great as this plan sounds, it didn't account for travel to and from work and although I can get lifts off family members/neighbours, it is still a good 20 minute drive each way and I feel bad asking them to take so much out of their day for me when I am sure they have other things to do.

    I've got a full time job, at minimum wage so I earn about €250 a week. This is rota work though so hours can be variable. About €50 of this is going to go to my mother as I moved home. I was going to take €120-150 out a week for saving and the rest for personal spending (my boyfriend lives in Limerick so it would cover a bus fare every two weeks or so). Now I'm thinking it might be better if possible to get a car loan of about €4000 after Christmas, to cover both cheapish car and insurance.

    I have a full license and a named driver on my mother's car. I'm with Ulster Bank and so would be getting the loan with them. The plan would be to get the loan and pay it back over a year. I also have to take out a larger loan in two years to cover fees for a Masters course.

    Would it be worth doing? Do I have any better options?


Comments

  • #2
    Atlantic Dawn
    Registered Users, Registered Users 2 Posts: 84,761 ✭✭✭✭Atlantic Dawn
    M


    You need to look in to it properly, no point in getting the loan and then discovering every cent you have is nearly going in to servicing the loan and then when year 1 is over you then have to get the insurance and tax money together again which you might not be able to afford. Put out all expenses you think for the car like NCT, tyres, fuel, service etc and then add about 20% to cover anything unexpected.


  • #3
    Foxhole Norman
    Registered Users, Registered Users 2 Posts: 5,875 ✭✭✭Foxhole Norman


    I took out a €2k loan last year with the CU over 5 years to pay for my car, have it half paid off already and that was just throwing in 20 a week. I was typically only earning €140 a week but I found this more than enough to Tax/Insure/Run a 2.5 Petrol along with having enough for my other activities.

    I'd always look towards a loan to be honest!


  • #4
    Idbatterim
    Registered Users, Registered Users 2 Posts: 18,126 ✭✭✭✭Idbatterim


    ok most importantly price up insurance before doing anything! motor tax and the cost of buying are predictable. If you are going to borrow, I wouldnt borrow for more than 2 years personally, not for small amounts anyway. The interest over 5 years etc becomes a joke on the likes of 3k etc...


  • #5
    ironclaw
    Registered Users, Registered Users 2 Posts: 8,004 ✭✭✭ironclaw


    The plan would be to get the loan and pay it back over a year. I also have to take out a larger loan in two years to cover fees for a Masters course.

    That's a lot of finance to be taking out. Is you job secure? Can you depend on, worst comes to it, 3 years of solid work? With the Masters, will you be able to continue to work? The interest on a year long loan will be high. Can you borrow from a friend or relative to avoid or negate the interest? €2000 is only €75 saved per week for 26 weeks, and if you arn't picky, you can get a cheap run around all in for that. I'd caution finance on such a small amount.


  • #6
    Ave Sodalis
    Registered Users, Registered Users 2 Posts: 7,555 ✭✭✭Ave Sodalis


    ironclaw wrote:
    That's a lot of finance to be taking out. Is you job secure? Can you depend on, worst comes to it, 3 years of solid work? With the Masters, will you be able to continue to work? The interest on a year long loan will be high. Can you borrow from a friend or relative to avoid or negate the interest? €2000 is only €75 saved per week for 26 weeks, and if you arn't picky, you can get a cheap run around all in for that. I'd caution finance on such a small amount.


    Yes, job is fairly secure. At least everyone else there seems to be there for many years. With the Masters, I can work as it'll be part time. I'm afraid I've no one to borrow from and €2000 may only cover insurance. The last time I went looking for insurance, the cheapest I could get was €1600 for a Punto which I subsequently had to sell, and I can't see it being much cheaper with the 40% increase. As I am 21, I would ideally be looking for a car 13 years and younger and would be driving to Limerick from Donegal regularly so would be looking for something that will be up for fairly high mileage and would be a bit more than a run around.


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