Finance or Loan??

goonersnroses

Hey all,

I recently purchased a peuguot 306 and want to get a loan or finance €4000 and it seems the more people i ask what i should do the more confused i get....i can get a credit union loan for for 130/month which works out at €4680 to pay back but the garage say thats stupid if i can pay 122.81/month or €4422 to pay back with them..some of my friends say to stay away from finance because they will own the car until the last payment is made so if anyone with experiance or advice can shed some light on the subject for me it would be much appriecated!!

prospect

I'd go with the credit union.

If you have a tough month, you can call them and usually they are cool if you want to skip that months payments.

Also, if you accumulate some extra cash, you can pay off bigger amounts, and clear the loan quicker, and cheaper, at no extra cost.

e.g., if you have €1000 payed off, and you come into some money, you only have to pay off the balance owed, and not the unpaid interest.

goonersnroses

Thanks for the advise prospect...now im gona go over to them and try haggle them down because they want 6700 for an 01 car which isnt bad, its a nice car with a high spec finish inside and only 30000 miles but in a few weeks it'l be another year older plus im a first timer so im not leaving them a trade-in to try and get rid of too...so i reckon im in a good position!!

Del2005

but the garage say thats stupid if i can pay 122.81/month or €4422 to pay back with them

They get a big fat commision for selling you this. Go with the credit union as stated, they are easier to deal with. For the sake of EUR8 a month the car is yours to do with as you please, not theirs till the last payment.

goonersnroses

Del2005 wrote:

They get a big fat commision for selling you this. Go with the credit union as stated, they are easier to deal with. For the sake of EUR8 a month the car is yours to do with as you please, not theirs till the last payment.

Yeah thanks Del im def gona go with the credit union mate!!

prospect

By the way, apply for a personal loan, not a car loan.

Kimbot

Finance works out alot more expensive!! They say you pay back X amount but the small print also says "plus a last payment of X amount"!!!

goonersnroses

prospect wrote:

By the way, apply for a personal loan, not a car loan.

Has a personal loan got a cheaper interest rate??

goonersnroses

jonny24ie wrote:

Finance works out alot more expensive!! They say you pay back X amount but the small print also says "plus a last payment of X amount"!!!

Its always too good to be true..they obviously need to be making worth there while !!!

prospect

goonersnroses wrote:

Has a personal loan got a cheaper interest rate??

No, but if it is a personal loan, it is not linked to the vehicle, so you own it from the day you hand over the draft/cash.

Stephen

^ what he said. This is how I borrowed the 10 grand I needed to buy my car. Paying off just about 300 a month for 3 years then its gone.

colm_mcm

Del2005 wrote:

They get a big fat commision for selling you this. Go with the credit union as stated, they are easier to deal with. For the sake of EUR8 a month the car is yours to do with as you please, not theirs till the last payment.

They are hardly gonna get a fat commission cheque

A) if he's only borrowing €4,000

If the monthly amount is €8 per month less than the credit union are charging.

ciarsd

Go credit union or personal loan (i.e. Tesco finance etc <-- they're competitive). It will work out cheaper and you've got a better grasp on your purchase. It's clearcut and no gray areas, unlike some clauses in finance packages..

colm_mcm

Go with the cheapest you can get. HP or otherwise, you're hardly gonna get into a situation where a €4,000 car gets repossesed. You're in trouble if you don't keep up repayments if you get a bank loan as well.

ciarsd

True, but at least the car (in theory and on paper) is theirs from the start unlike the finance deals.