Buy a new car or not?

dellas1979

I am interested in buying a new or newish car.

I have €20,000 in savings (lodged in a high interest account).
In 2 years it has yielded me about €1400 so I would like to leave it there another few years (I am almost 30 and would like to buy a house in 2-3 years).

Anyways, I have questions about financing this car – I have never bought a new car or have had a loan. I have no debt (no I don’t live at home-I rent). I am in college part-time doing a Masters also (paying tuition fees and I work 4 days a week).

These are the following options as far as I can see:
Option 1 car for €12-13000: Also at my disposal I have about €3000 on hand in another bank account. What do you think if I got a loan for that amount and left the €3000 in an account to begin paying off the loan? I could top it up every month with around €100 for future loan payments. Is this something people do? I could then sell the car off in 2-3 years. Its tax is €100 per year, 4 year guarantee and 4 years AA coverage.
Option 2 car for around €5000: There is a 1L 06 for 5500 that I am also kinda interested in-not as much as the one Id like for 12000-13000. But of course it would make more financial sense. I would still be €2000 short. So I was thinking of getting a loan for 2000 (again putting 100 a month into an account to pay off loan). Think it would work out about 50 or 60 a month over 2 years.

Option 3 stay with the car I have: This isn’t such a bad thing – but Ive never had a newish or remotely new car (current car is 12 years old NCT’d for another year). But Ive worked hard, why shouldn’t I treat myself to something new?

From what I have told you, what do you thing I should do? I guess I am just looking for advice financially. I am normally very very cautious about what I spend money on – but I dunno, since I am hitting my 30s I kinda think I should be looking after myself more rather than saving all the time. I know we are in a recession so I am torn as to what to do.

stupidbaby

The only advice I'd give you is not to bank on the resale value of your car in 2-3 years. Car prices seem to be collapsing...

alpina

Unfortunately, but realistically buying a new car is the worst decision one will ever make, but yes we all do it.:o The current state of the car market would make anyone stay put & allow it ride out. You have a nice sum gathering interest so would allow to accumulate. €13k in a deposit a/c will be worth €13k+ in three years,(as long as Lenihan keeps his grubby hands off) in a car will possibly be floating around €5k, it really is a no brainer. No one knows what's around the corner with the car market so if your car does not need to be parked on top of a hill to start, is waterproof & omits a legal amt. of blue smoke, keep saving for the house & pick up the car you admire now in 3yrs. for 30% of the current price.;)

My 2c anyhow...Good luck

Woodgate

Personally, I wouldn't buy a NEW car, you are p*ssing money away. Even buy a year old model and you could pay substantially less. If your priority is a house in the future, don't waste money on cars, if you buy a fairly fresh car for the right money you won't lose out too much if selling in a couple of years, whereas if you buy new and you need to sell you're f*cked, you would take a serious hit. All of this is just my opinion, it's up to you in the end.

PhilipMarlowe

If you are looking at buying a house in the short-term, find out what percentage of that house value you will need to have as a deposit... probably a minimum of 10% and more likely to be higher.
Then get it out of your head that a new-ish car is a 'treat'. You are buying a liability.

RiverWilde

I have to agree with the posters here, a newish car as a treat is a great idea if your boss/company is picking up the tab, otherwise eh no.

My car is 14 - 15 years old, an elderly auld bus. It is however, nct'd, waterproof (mostly) water got into the drivers door during the week still trying to figure out how. Solid as a rock on the road etc etc yadda yadda. Why spend silly money on a car that will depreciate faster say the word when you can buy a very good car that will last years if you look after it etc etc.

The way the auld economy is going dealers will be giving cars away with 2 quid raffle tickets

Down with VRT I say.

Riv

Tony Broke

You sound level headed, so dont get a loan.

You right though, you have worked hard and you should treat yourself.Im trying very hard to be where you are now, but something always comes up lol.

You have 3000e which is alot of money these days, you can get something nice, comfortable and reliable for that.

http://www.driving.ie/usedcars/index.cfm?fuseaction=car&carID=1283204

Btw what bank are you with? 1400e every 2 years on 20000e is very good, fill me in

ninty9er

If you just want a change, something like this would be nice.

http://www.carzone.ie/search/Saab/9-3/SE-2.0-T/200902191396575/advert

Get a 2 year loan, so that the liability is gone by the time you're buying a house, keep the €3k you have for tax and maintenance.

Tony Broke

^^^^

He wants a small car, not a turbo, €630 road tax, petrol guzzler :pac:

ninty9er

Tony Broke wrote: »

^^^^

He wants a small car, not a turbo, €630 road tax, petrol guzzler :pac:

Small is what's alluded to, but not specified. Most small cars aren't what you'd call "nice".

€630 for 5 years is still less than €14k on option 1.

Tony Broke

ninty9er wrote: »

Small is what's alluded to, but not specified. Most small cars aren't what you'd call "nice".

€630 for 5 years is still less than €14k on option 1.

That Saab is hardly nice?

It looks ancient!

OP just doesnt seem like the 2.0l turbo type, thats all I am saying.

DanGlee

Your very level headed... you don't see that much these days... so I'm sure whatever decision you make will be well thought out and the right one!

But... saying that, if your looking to live it a little before you settle down, I have a Smart Roadster Coupe Brabus (black) 2005 that I'm looking to shift... the missus is preggers, so I'm the other end of the scale from you dude! I've had my fun and looking to settle... However it would be €11k ish... and if your only looking to spend a small amount I wouldn't want to be the person to put you out to of the limit you have!

You have a plan man.. stick to it (otherwise Smart Roadster ) (google it!)

Good luck!

DG.

L-M

DanGlee wrote: »

Your very level headed... you don't see that much these days... so I'm sure whatever decision you make will be well thought out and the right one!

+1

OP, if you have that money, keep it. Very simple. There is nothing a newer car won't do for you than an older one. For example, if you were thinking of buying a 05 Passat, just buy a 01, your essentially getting the same thing.

What car are you thinking of buying?

I know house prices are coming down alot, but a car will depriciate alot no matter what you do. The fact that you have money, i say sit on it.