If you were buying a car and even though you had the cash to cover the cost of it, would you still get a loan out to buy it?
If the loan rate is anything over the rate of interest you’d get for a deposit then no.
Also save that money for Cheltenham
Sure the loan rate will definitely be over the deposit rate.
Ya so pay cash. You might get a better deal if you offer the garage/seller cash anyways.
Some of those places do 0% finance for two years or whatever. If you could get that then put the money in a bank account and take the interest for two years. Hopefully in the meantime the garage will go bust.
Jayzus.
Are you sure there isn’t an adult that can help you with this?
Car loans are typically 10-15 %, which is frankly ridiculous given the kind of lending that went on before.
A brief excel spreadsheet using interest figures available (e.g. from itsyourmoney.ie) will show you how much you’d be forking out for the privilege of receiving a loan from a bank capitalised with your income tax.
One thing to bear in mind, you’ll probably be offered some sort of hire-purchase agreement, meaning you won’t own the car til the final payment and the make, model, valuation etc. will all impact the cost of paying back the bank.
start here: loan rates
spend the money you have, forget the loan.
It’ll be from the credit union, and will only be about 5k so will probably qualify for a personal loan at around 8.3%.
My thinking is along the lines that I will always have a car loan, and can afford to make the repayments so why blow a chunk of cash on a car that will be worth very little in 2/3 years when I look to change up the car again and will have to get a loan out then anyways.
Maybe it’s flawed thinking.
I’ve decided it could be flawed thinking.
I would be better off pay 5k cash now.
Then save an amount each month equivalent to the loan repayments into a seperate account so when it comes to changing the car in a couple of years time I have the money in the account + any interest it may have earned.
Edit: actually does that even make sense???
forget about the car, think in terms of the pot of cash you have.
you can stick it on deposit, earn about 5% and take out a loan for the car paying 8.3% back.
(i’m accepting the 8.3% for now, but bear in mind some credit unions get their loans from AIB and basically offer the same deal as the bank, but with less hassle to apply)
your car loan thus costs you 3.3% (assuming the loan sum and deposit sum are equal)
whereas if you pay cash,(and ignoring the bargaining power this gives you) means you pay nothing to a bank over the lifetime of the car.
one slight advantage i can see from taking out a loan is to improve your credit rating longer-term by demonstrating an ability to pay it back.
I assume you’ve saved up the cash sum over time?
which means you can continue saving, building up another pot for a few years time when you change up the car, instead of forking over a few hundred a month to repay the loan.
the loan will cost you more than spending your own money. it also reduces your ability to save, since you now have regular repayments. the main advantage i see in the loan is if you want to hold on to your cash sum for “a rainy day”, but you’re paying a price for this. (the 3.3% mentioned above)
Is this the same as what I posted just before you?
basically, yes.
you should be proud.
Is this definitive proof that the runt is a simpleton?
It’s certainly looking that way 
:rolleyes:
FFS.
I like the idea of having cash available to me, should I want to do something proper with it a few months down the line.
Take Georgie’s advice:
I spent a lot of money on booze, birds and fast cars. The rest I just squandered.
Titties and Beer all the way lad.
Id get a loan if it were all your savings you were spending.
The day you are most badly stuck you wont be able to borrow.
The difference in the interest youl pay on 5 k or gain by having it on deposit is marginal and probably the price of two nice dinners.
As a man who has played poker Runt you need to manage your pot.
I’d take Carter’s word for it lads, he knows a banker I think
Any advice in relation to putting money in banks, dan??
Stick it in the Post Office Dunph.
I put mine into Rabo Direct Dunph. Shit interest rates though. I really cant see that you will lose your money if you put it into any of the Irish banks. If that happens wel be back to using butter vouchers and the barter system anyways