Motor Loans

MrWenger1982

Hi,
I am 23 and thinking of buying a car worth 13k in January. I have never got a loan of any description before. I have 3K to put towards the car so I will probably get a loan of 10K to cover the rest of the cost including insurance etc. I am changing jobs in January and my new salary will be 30k so hopefully will have loan paid back within a year. Has anybody any advice on the best place to get a motor loan? Credit union, BOI, Ulster bank etc. I have a current account with BOI if that makes any difference.

I was thinking of paying roughly 100 euro a week back on direct debit which would take about 2 years to clear. But I will probably save an additional 5k which I want to pay back in a lump sum at the end of year 1 to clear the loan. I just don't want commit myself to it cos I may need to money for something else. Do banks have a problem with this?

MrWenger1982

Has anybody any ideas at all? I would be grateful for any advice

DublinWriter

MrWenger1982 wrote:

Has anybody any ideas at all? I would be grateful for any advice

Go ring around a few banks and explain the situation to them. They'll offer you either fixed rate or variable rate interest. Most penalise for early payment on fixed rate, but not for variable rate.

Most importantly, ask for the APR rate.

homeOwner

MrWenger1982 wrote:

I am 23 and thinking of buying a car worth 13k in January. ....so I will probably get a loan of 10K to cover the rest of the cost including insurance etc. .....my new salary will be 30k so hopefully will have loan paid back within a year.

All I can think of to say is why? I do not understand the logic of you putting yourself into such debt for a car. Buy a banger for 3K and run it into the ground. At least you are not taking out loans for it. You cannot afford a car worth 13K, your salary does not justify it. Being 23 you are likely to be paying around 2K for insurance. Not to mention servicing it and paying tax every year and petrol isnt cheap. Its madness. I earn farrrrrrrrr more than you do and would not even consider spending that kind of money on what is essentially a luxury item.

Sorry to rain on your parade but I just think its insane.

eth0_

homeOwner - he seems to have taken his financial situation into account, I think you're being very unfair and condescending with your "I ear farrrrrr more than you do" attitude.

OP - I got my car loan through Ulster Bank, I think it's the lowest rate around, and because it's a variable rate, you can pay off lump sums whenever you want without penalty.

homeOwner

eth0_ wrote:

homeOwner - he seems to have taken his financial situation into account, I think you're being very unfair and condescending with your "I ear farrrrrr more than you do" attitude.

I am not being condescending I am pointing out in my opinion he cannot afford the car. He posted his details out in public and I commented. I am not looking down on him or thinking I am superior (which is the definition of condescending), but merely offering advice that was solicited by the poster. "I would be grateful for any advice"

Get off your high horse.

lomb

a 13 grand car loan isnt alot for someone making 30k, however it all depends on his priorities, if he wants to buy a house or buy a car. buying the car will dent the old road to home ownership certainly but some people prefer a car tbh. horses for courses...
the sanest thing is probably to forget the 13k car. there are numerous good/great cars around the 5 grand mark. buy a jap 1997 or 1998 almera or something, as good as anything with a 06 plate and cheap..

cavanlad1982

HomeOwner, I will still be in a comfortable financial state. A salary alone doesn't represent a persons financial situation as I'm sure you know.

I was only asking for what people thought were the best rates going!

CCOVICH

You should be able to get 7.9% fixed from Tesco.ie.

ixus

If you're buying from a dealer i'd advise not taking their finance package offered (they work on commission as you probably know).
Other lending sources to check would be to go direct to the motor lending companies that the car dealer would use to get a loan. This way you'd cut out their commission.
Generally, minimum lending is 3 yrs and €5/6 K

I see one of the companies is doing an interest only package now wit something like 40% up front and the rest at the end of the term of loan.

woody

Would you not join a credit union as there rates are great for example in Dundalk the current APR in one of the credit unions is 6.9% and remember there loans include free payment protection etc.

As for Hire Purchase etc you are getting raped with interest and penalities if you pay off early or miss payments.

I paid my car loan of with lombard within one year of getting it the car cost 16,000 and they forced me to pay the full interest after going to solicitors etc I had to pay it and cost 22,000

With a credit union you see what you owe up front stay away from the filthly banks and motor Loan "specialists" go in with cash from a credit union haggle and get a good deal.

Also if you come up hard times or loose your job you can renegotiate with them until your back on your feet.

All my dealings now are done through them and will never touch a bank for loans every again or anyone bar the CU

woody

CCOVICH wrote:

You should be able to get 7.9% fixed from Tesco.ie.

7.9% is rarely given out only to persons supposedly with perfect credit ratings if you look closely it is more around 9.8% and they are under written again by filth GE Money....more scum...always read to see who these people are underwritten by

woody

eth0_ wrote:

homeOwner - he seems to have taken his financial situation into account, I think you're being very unfair and condescending with your "I ear farrrrrr more than you do" attitude.

OP - I got my car loan through Ulster Bank, I think it's the lowest rate around, and because it's a variable rate, you can pay off lump sums whenever you want without penalty.

etho lombard are the same as Ulster bank but methinks your facts are slightly wrong you will be penalised heavily even with a variable rate loan which I had.... fixed or variable they will make there money

CCOVICH

woody wrote:

7.9% is rarely given out only to persons supposedly with perfect credit ratings if you look closely it is more around 9.8% and they are under written again by filth GE Money....more scum...always read to see who these people are underwritten by

AFAIK, Tesco loans are underwritten by Ulster Bank

The 6.9% APR quoted in relation to Credit Unions may be misleading-does this factor in the money you have to have on deposit before you can borrow?

There is no such thing as 'free' payment protection. The costs will be factored in through the APR.

Anyone who repays a fixed rate loan early is liable for early redemption penalties-always read the terms and conditions and small print carefully.

Describing banks and other credit providers as 'filth' and 'scum' suggests that you are slightly biased.....

But if the OP can get better than what's on offer through a bank etc. through their local CU, then fair enough.

RainyDay

I'd agree with Homeowner. If he needs to borrow 10k, he can't afford it. Buy a €5k car and start saving. When you have the cash in your pocket, buy a better car.

lomb

if u need to borrow 10 grand for a house can u afford that? lol, its horses for courses:p

RainyDay

lomb wrote:

if u need to borrow 10 grand for a house can u afford that? lol, its horses for courses

No - he probably won't be able to afford the house either, as his borrowing capacity will be substantially reduced by his outstanding car loan. But if he starts saving & avoiding the interest payments that will apply to his loan, he might just be able to avoid a decent car & a decent house in the future. If he insists on living on credit, he'll make bank shareholders like me richer and make himself poorer.

steviec

RainyDay wrote:

If he insists on living on credit, he'll make bank shareholders like me richer and make himself poorer.

Maybe he'd rather be 'poorer' and live a more comfortable life than have some extra cash in the bank while he sits in the pouring rain at the side of the road waiting for a mechanic to come repair his banger.

Although obviously there are good, reliable cars out there relatively cheap, I'm just saying there can be more important things than how much cash you end up spending.

lomb

also there is value in a nice car, he might feel better, and this might stir his soul enough to go and set up a successful business and become richer than u or i ever become. who knows, what the moral of the story is, but i think if he wants it he should run with it.

RainyDay

steviec wrote:

Maybe he'd rather be 'poorer' and live a more comfortable life than have some extra cash in the bank while he sits in the pouring rain at the side of the road waiting for a mechanic to come repair his banger.

Although obviously there are good, reliable cars out there relatively cheap, I'm just saying there can be more important things than how much cash you end up spending.

Why wouldn't he sit in the car & stay dry while he waits for the mechanic? Or more seriously, why wouldn't he put the money he saves on interest into good servicing and/or emergency call-out service to protect himself? If he stretches himself to buy a €13k car, is he going to be able to service it properly? To get it through the NCT?

lomb wrote:

also there is value in a nice car, he might feel better, and this might stir his soul enough to go and set up a successful business and become richer than u or i ever become. who knows, what the moral of the story is, but i think if he wants it he should run with it.

Do you really think that OP is that superficial? If he needs a nice car to inspire him to set up his business, he's in big trouble. And if he is that superficial, hunger for a really, really nice car is going to be a far bigger motivator. Remember the more he borrows, the more interest he pays the bank, the less cash he has available to spend on the car or invest in his business or whatever.

Did you see tonight's Show Me The Money on RTE? A single-mother of a 12 year old living in a council flat, earning €32k net, spending €54k net (including her 4 holidays per annum & repayments on her €28k brand-new VW Golf) and with debts of €45k was 2 weeks away from commital to prison by one of her creditors. That's what happens when you spend beyond your means.