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Loans + Cars = Good Idea?


Sam Nichols
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Basically Im thinking about getting myself a swanky car to go with my new job (assuming I get it!).

Ive never bothered with a nice car, just always cruised around in a battered up van because it was 'practical'

The time has come to forget practicability though sooo..

Have any of you guys ever bought a car with a loan? What have your experiences been? Roughly how much do you pay per month? Is it a bad idea?

Just anything you thnk that might be useful to me.. It would only be like 3-4k max.

Edit = TypeOh

Edited by nichols_sam
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i've had 5k, 7k, 3k, and another 7k loan. The more you get the lower the interest is, as a general rule of thumb.

I have paid 130, 108, 239, 170 , ish, per month, not all at the same time.

When you're in a SECURE job, where you 'know' you'll be there for a looooong time, it's fine. I am in a career, rather than a job, so i'm safe as far as taking loans go, which is why i have no problem. I've a good credit rating and can get good interest rates. I'd not go for a variable rate; fixed rate you know where you're up to...

Loans are brilliant if you know you'll have the money each month. If this new job will be bringing the money in to pay for the loan, do you know if you'll have it in 3 years?? Is it a long termer...

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If you're getting a new job just buy a car on finance, pay it off monthly with the money you make.

Loands are a joke you end up paying a huge amount more back than you borrowed, so say you borrow 3 grand...you end up paying back something like 4500/4700....well you might have spent 4500/4700 on a better car and payed it off monthly.

Always avoid loans - they are not to help you!

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Basically Im thinking about getting myself a swanky car to go with my new job (assuming I get it!).

Ive never bothered with a nice car, just always cruised around in a battered up van because it was 'practical'

The time has come to forget practicability though sooo..

Have any of you guys ever bought a car with a loan? What have your experiences been? Roughly how much do you pay per month? Is it a bad idea?

Just anything you thnk that might be useful to me.. It would only be like 3-4k max.

Edit = TypeOh

MK4 Golf GTTDI!!!! f**king pimp Cars look the muts nuts and shift like shit off a shovel and it's a deisel so alot better on fuel consumption :)

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When you're in a SECURE job, where you 'know' you'll be there for a looooong time, it's fine. I am in a career, rather than a job, so i'm safe as far as taking loans go, which is why i have no problem. I've a good credit rating and can get good interest rates. I'd not go for a variable rate; fixed rate you know where you're up to...

Loans are brilliant if you know you'll have the money each month. If this new job will be bringing the money in to pay for the loan, do you know if you'll have it in 3 years?? Is it a long termer...

This is the reason Im considering the Loan option.. Currently im in a JOB but assuming all goes well I will be entering into a career.. Plus I will have a contrat with them for x amount of years anyway so I will certainly have the regular income to pay it off.

What will effect my credit rating? Ive never had a loan or borrowed any kind of money.. Does this mean I have no credit rating at the moment?

MK4 Golf GTTDI!!!! f**king pimp Cars look the muts nuts and shift like shit off a shovel and it's a deisel so alot better on fuel consumption :)

ROFL

Did you even read my post?

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If you're getting a new job just buy a car on finance, pay it off monthly with the money you make.

Loands are a joke you end up paying a huge amount more back than you borrowed, so say you borrow 3 grand...you end up paying back something like 4500/4700....well you might have spent 4500/4700 on a better car and payed it off monthly.

Always avoid loans - they are not to help you!

What?????

What a load of shit. APR is APR. Whether it is on a personal loan, or with finance on the car, if it's 6.9%, you'll pay the same back! Ohhhhh, sorry, i didn't know when you get a car on fincance the APR is magically lower.

IF, you can get 0%, then fair enough, but you already said it's 3k - 4k, so you're buying second hand, which means if you end up buying from a dealer, his finance, while it may be competative, will have very similar APR to any other personal loan which you could get.

It's like,

"i'll lend you money, with 6.9%APR but you can buy a car. ONLY a car, ok??"

or

"I'll lend you money, with 6.9%APR and you can buy anything at all, ok??"

Which one would you go for?!

If you get finance, you cannot sell the car unless it's all paid for, well you can, but if you went to buy a car, and the guy hadn't finished paying for it, would buy it???

If you get a personal loan, you immediately own what you buy, and you owe an independant company (bank/loan company etc)

Mathew 62, you just talked a bit of shit there... :giggle:

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your credit score comes from all sorts of transactions.

Contract phones, any direct debits and standing orders... Credit cards, AA membership, car insurance, gym membership etc etc. Loans, repayments etc etc all help build it up if you pay on time.

It's good to have a dcredit card and spend £10 per month on it. Pay it off straight away and over time they see you're a good repayer.

Bongo

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Contract phones, any direct debits and standing orders... Credit cards, AA membership, car insurance, gym membership etc etc. Loans, repayments etc etc all help build it up if you pay on time.

Bongo

Ive had a contract phone for 2 or 3 years so that may help. Getting a credit card and using it like you said might be a good idea actually.

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What?????

What a load of shit. APR is APR. Whether it is on a personal loan, or with finance on the car, if it's 6.9%, you'll pay the same back! Ohhhhh, sorry, i didn't know when you get a car on fincance the APR is magically lower.

IF, you can get 0%, then fair enough, but you already said it's 3k - 4k, so you're buying second hand, which means if you end up buying from a dealer, his finance, while it may be competative, will have very similar APR to any other personal loan which you could get.

It's like,

"i'll lend you money, with 6.9%APR but you can buy a car. ONLY a car, ok??"

or

"I'll lend you money, with 6.9%APR and you can buy anything at all, ok??"

Which one would you go for?!

If you get finance, you cannot sell the car unless it's all paid for, well you can, but if you went to buy a car, and the guy hadn't finished paying for it, would buy it???

If you get a personal loan, you immediately own what you buy, and you owe an independant company (bank/loan company etc)

Mathew 62, you just talked a bit of shit there... :giggle:

Yeah i know what you're saying, neither are ideal situations though unless unavoidable.

However if the guy only wants to spend around £2000/£3000 and currently has a van surely if its a steady job just put some money away each month and pay it off with your own cash...shouldnt take too long to save up and you've already got a means of transport.

Paying back more than your using is always going to be a bummer.

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I'd go with the finance (unless your going second hand), then at least if your career goes wrong and you end up out of employment the worst that'll happen is your car being taken. you don't really want to secure anything against your house if you can avoid it.

Edited by G4vyn
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he he what you after :) I think the GTTDI is the sex :) Or an R32 but good luck for 3-4k

What's so great about the GTTDI? 138bhp, that isn't 'shit off a shovel'. A honda civic 2.2 tdci has similar performance figures and costs about 5k less

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What's so great about the GTTDI? 138bhp, that isn't 'shit off a shovel'. A honda civic 2.2 tdci has similar performance figures and costs about 5k less

138bhp... That's less that my 170kg motorbike :-

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What's so great about the GTTDI? 138bhp, that isn't 'shit off a shovel'. A honda civic 2.2 tdci has similar performance figures and costs about 5k less

a quick remap will see 180bhp and 400nm torque. I know this because we have the audi version.

there not hugely fast but quick enough to put a smile on your face and still look senseible, Ie you don't really want to start a nice smart new job with a cossie fiesta just because it performs well.

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I got a loan out to buy a car and have regretted it pretty much ever since. Still paying £130 every month for a car i sold 2 years ago gets tedious really fast. I always find myself needing bits and bobs for my current car and thinking that extra cash would be really handy.

If you think that you can handle the payments easy enough and your planning to keep the car for a while then go for it but circumstances can change quickly and your gonna have those payments to make for a minimum of two years.

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I got a loan out to buy a car and have regretted it pretty much ever since. Still paying £130 every month for a car i sold 2 years ago gets tedious really fast. I always find myself needing bits and bobs for my current car and thinking that extra cash would be really handy.

If you think that you can handle the payments easy enough and your planning to keep the car for a while then go for it but circumstances can change quickly and your gonna have those payments to make for a minimum of two years.

That's rubbish when you have to do that, but that's not because you go a loan. It's becasue you sold the car before you finished paying for it. By choice???

You should have saved for a new car so that the money you got for selling your previous car was used to pay off the loan. The fact that you didn't pay the loan off indicated that you used the money to get another car. So that means you are paying £130 for your current car in effect.

If you look at the bigger picture, you are in the position you are in becasue of your own decisions of selling the car early/not using the money from the car to pay the loan off/not saving for your next car.

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That's rubbish when you have to do that, but that's not because you go a loan. It's becasue you sold the car before you finished paying for it. By choice???

You should have saved for a new car so that the money you got for selling your previous car was used to pay off the loan. The fact that you didn't pay the loan off indicated that you used the money to get another car. So that means you are paying £130 for your current car in effect.

If you look at the bigger picture, you are in the position you are in becasue of your own decisions of selling the car early/not using the money from the car to pay the loan off/not saving for your next car.

True but i was in the position of not being able to save for a new car because i was still paying off the one i had! What i should have done is kept the car until i had paid it off and then saved for a new one, so i do see what you mean. It was my own fault. I think if you're good at managing your money you'll be alright, what i found out is that im not!

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If you can get a 6.9% personal loan, (which you can, from a million lenders), how is a finance deal going to beat that, unless it's 0% (which it wouldn't be on 3k - 4k)

You're giving advice and you're 17, you're not even legally allowed to get a loan, and you're probably on your very first car, if you've even passed your test, so to be giving advice about buying cars, personal loans and car finance seems a bit strange.

Sorry to be narky, but everyone seems to give a million bits of advice here whether they are experienced in what they're talking about or not.

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If your cool with your money, and you plan on buying from a garage.theres another little golden trick, which you can use, may not work because of your low credit rating. but, take my current situation with a credit card.

Got a paypal credit card with a £4000 limit, which was 0% on purchases for 6 months.there are some for 12 months out there too. if i went to a garage that accepts credit/debit cards, which most garages do. and paid £4000 worth of the car, on the credit card. id then have 6 months paying back the minimum repayment, which is 2% of the balance for me. so your looking £80 a month. you save the other £70 a month.

so by the end of the 6 months, you have a debt of £3520, and a nest egg of £420.

you then swap yourselve over to a 0% balance card, of which you will find one offering 12 months on balance transfers no sweat. charge for this is normally 3%, so you have your £3520 which you owe + about £100 in balance transfer fees.

your current debt stands at about £3600.

you then carry on paying back £80 a month, and saving £70, for the next 12 months. at which point you will have a debt of about £2600. and about £1250 saved (including the orginal £420 after 6 months).

pay off the £1250 you got saved, and your down to £1300, which you then balance transfer for another 12 months. for about a £40 fee.

total debts now at £1340, now paying back the minimum, of about £40 a month. and saving £110.

at the end of that 12 months, your owing £900. and have £1300 ish saved.

you pay off the £900 you owe, and probably get smashed on the £400.

but youve just had a 2.5 year loan, on £4k. repaying, only £4140, including balance transfer fees.

and thats before you take into account, the interest that your money you save each month earns in a high interest instant access savings account.

its a bit more hastle, and you may get knocked back at the first hurdle with getting a card. but its a nice cheap way of doing it and gives you some flexibility on payments, should you get a massive pay rise/lose your job. but you must be able to control yourself with money etc

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