Car ForumCar finance your opinion
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Car ForumCar finance your opinionPosted:
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| I'm looking for used car Audi A5 S line (£8000) but i don't have the money so I am looking into car finance and I'm just wondering if its good idea or not and to see if anyone else is doing it. |
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There is a ton that goes into it. A lot of people finance cars, if you're asking the question I'm assuming this is probably your first loan so you have a lot of challenges ahead. First challenge is you have no credit so it'll be hard to get someone to give you a loan without a co signer or a big down payment. Once you have a co signer / big down payment, be prepared for massive interest rates.
Just as an idea, my first loan was for a 2013 Ford Fusion which was $7k if I remember right, I put $3k down and had an interest rate of 23.99%. By the time I paid off my $4k loan, I would've paid like $2500 in interest or something like that so you are throwing away a lot of money. In my opinion, especially for something like a used Audi, if you can't but it out right then you can't afford it. I personally buy all of my vehicles out right now because it's a small major purchase in that it's small enough to be able to be bought in cash but big enough to wipe out your savings. Now if you had $8k sitting in the bank, I would say take out the loan since you still have the money to cover it if things go bad. What if you lose your job or break your back and can't work? You lose the car and all the money you put into it unless you pay it off. |
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| If you have a stable job with regular income then I see no problem with it at all. Just make sure you can keep up the monthly repayments otherwise your credit score will be screwed. |
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Don't fall in the trap of getting a loan just because you want a nice car. If you don't have a monthly budget already set out with enough disposable income that you are willing to put aside for the loan duration I really suggest you do so.
Getting a car loan can be a good idea. Its a nice way to get your credit score up but it can also bite you in the ass if you don't keep up with payments. If you don't have a super stable job I wouldn't really suggest it unless you already have a decent savings that you could use. Also, you really want to shop around different banks to see their loan rates. I am assuming you are buying through a dealership so they might offer some better rates on car financing. Don't forget to count in the on road costs of the car. Fuel, insurance, on road taxes (depends on country) etc. I really can't stress it enough, you don't want to default on the loan. I suggest talking to your parents if they are available, they may be able to get you a better rate through their bank. |
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This has a lot of lack of info to understand your situation....
If you are young then I would not suggest buying a car you cant afford... if you have a stable income then make sure you can still afford it and you like your job. In my instance, I financed my second Audi purely to build credit... I could have bought it out right but credit is also needed coming down the road so I did it that way... Maybe picking a lower end car for your first would be a good idea... cheaper payments still build credit...sure its not a A5, but it is a safer idea. Like i said I have no idea your situation but i am just assuming you are a younger guy and see a car you want so you are gonna do what you can to get it. I almost did that with a GTI, only reason I didnt is because they sold it before me... I am kind of glad they did because yes I can afford that payment but I also would not really be able to afford most of other life if I was to do anything. |
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I would recommend a car lease or hire purchase over car finance, you can get a new car every 2-3 years paying the same amount a month then hand it back at the end of the contract and then get a new one, with car finance you are buying a car over 3 years that will only depreciate in value.
but either way if you cannot afford to i would recommend committing to any credit commitments |
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PCP your car and it'll be lower monthly payments. You'll have the option to buy the car at the end of your term with a balloon payment - which is usually a couple thousand. If you don't want to pay that, then you can upgrade instead for no extra cost.
Make sure you have a steady income before you sign anything. Otherwise, car finance is harmless. Interest rates are NOT up in the 20%'s - highest usually is around 7/8% but most dealerships offer around 3-5%. |
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cSploit wrote I would recommend a car lease or hire purchase over car finance, you can get a new car every 2-3 years paying the same amount a month then hand it back at the end of the contract and then get a new one, with car finance you are buying a car over 3 years that will only depreciate in value. Once your lease is up though you loose all money you put into it. When you buy a vehicle it's yours so you can choose to sell it in a few years or keep it if you like it. I would not recommencement a lease because you lose a TON of money.I just seen an ad for a lease option at $199/mo. If you have that for 3 years then you just spent $7,164 and in 3 years you have nothing to show for it, or in 3 years the OPs Audi could be paid off and he can keep it. |
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Personally, unless I had a good chunk of money for a nice car's downpayment, I wouldn't finance a car.
I really enjoy not having a monthly car payment and having one I would need to be getting a very nice, new car. |
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I'll be the one who breaks the trend, no don't finance it. Honestly, lease a new vehicle. Think of it this way, you might be paying slightly more a month than a used car and not owning it in the end. However; the car is maintenance free, it's a brand new car and low cost, your building credit, and you're not dedicated to this car. Having flexibility is a great thing. Especially if you can build credit and eventually use that to finance or buy a car/home within the future. It's a short term investment that you're virtually covered for.
(Also I used to sell vehicles for awhile. I've done this, and it's been a huge help to me now down the road.) |
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