Buying a car - Car Loan a good option?

Shurwhynot

Looking into changing my car in the new year. I will be trading in my current motor and probably be putting €10k cash with the trade in. I have this money in my savings, but with the possibility of looking for a mortgage in the next 18-24 months, would it be beneficial to use €5k savings and get a loan for the remaining €5k, just to show my ability to pay back on an existing loan?

Atlantic Dawn

Don't take out a loan for the ability to show you can pay back. If you have the full required deposit amount for the mortgage and the €10k won't be part of this I would use the €10k to buy the car.

Avatar MIA

Shurwhynot wrote: »

Looking into changing my car in the new year. I will be trading in my current motor and probably be putting €10k cash with the trade in. I have this money in my savings, but with the possibility of looking for a mortgage in the next 18-24 months, would it be beneficial to use €5k savings and get a loan for the remaining €5k, just to show my ability to pay back on an existing loan?

In all likelihood, with the figures you're quoting, you'd most likely get nothing for the trade in or effectively charge you to take it away.

Can you try and give away/sell your own car privately and then go to the garage with €10k to buy the best car you can without any exchange hassle?

colm_mcm

I can't see any clues that the car being traded in is worth nothing?

Avatar MIA

colm_mcm wrote: »

I can't see any clues that the car being traded in is worth nothing?

You lose the ability to get a straight cash deal - the discount that will come with the trader not having to offload a likely low value car.

It happened to me recently. I was being offered €1,500 trade in. When I was offered €1,750 privately I didn't have to trade in and I got a €3k discount off the purchase price of the car I was buying. A €3,250 gain.

That was off a new car price, but the principle remains.

Shurwhynot

Avatar MIA wrote: »

In all likelihood, with the figures you're quoting, you'd most likely get nothing for the trade in or effectively charge you to take it away.

Can you try and give away/sell your own car privately and then go to the garage with €10k to buy the best car you can without any exchange hassle?

I'm trading in a 2010 Insignia SRI, albeit with high mileage, so I'd be fairly upset if i got offered nothing! Will be looking at a 2015 Insignia or up, and probably going to the North to avail of the weak sterling

Avatar MIA

Shurwhynot wrote: »

I'm trading in a 2010 Insignia SRI, albeit with high mileage, so I'd be fairly upset if i got offered nothing! Will be looking at a 2015 Insignia or up, and probably going to the North to avail of the weak sterling

Will a Northern Garage even take a ROI registered car as trade in?

But, I see where you coming from now, it's a decent enough car being traded in - still better off trying to sell directly

Avatar MIA

Also, you'd be trading in an Opel and purchasing a Vauxhall

Just a quick look there and garages sell 2010 Insignia's for approx. £4k for a 100,000 miles car. What would they purchase it for, especially an Opel - which would stand out a mile and probably 50%+ of the NI population wouldn't take it for free. :pac:

Atlantic Dawn

Avatar MIA wrote: »

Will a Northern Garage even take a ROI registered car as trade in?

But, I see where you coming from now, it's a decent enough car being traded in - still better off trying to sell directly

Some will but you will get feck all, much better to sell it down here private.

Shurwhynot

Avatar MIA wrote: »

Also, you'd be trading in an Opel and purchasing a Vauxhall

Just a quick look there and garages sell 2010 Insignia's for approx. £4k for a 100,000 miles car. What would they purchase it for, especially an Opel - which would stand out a mile and probably 50%+ of the NI population wouldn't take it for free. :pac:

Just to clarify it's a Vauxhall Insignia I have, but with Irish plates alright

Avatar MIA

Shurwhynot wrote: »

Just to clarify it's a Vauxhall Insignia I have, but with Irish plates alright

That'll help or at least mitigate.

Idbatterim

if you are going to be looking for a mortgage and concerned about finances, the best thing to do is simply keep your current car!

StupidLikeAFox

Shurwhynot wrote: »

Looking into changing my car in the new year. I will be trading in my current motor and probably be putting €10k cash with the trade in. I have this money in my savings, but with the possibility of looking for a mortgage in the next 18-24 months, would it be beneficial to use €5k savings and get a loan for the remaining €5k, just to show my ability to pay back on an existing loan?

The loan would count against you in a mortgage application because its an additional debt. The banks would prefer to see a strong savings record without the debt.

If you could hold out a bit longer, its a lot easier to get a car loan when you have a mortgage, than get a mortgage when you have a car loan

StiffOldMan

StupidLikeAFox wrote: »

The loan would count against you in a mortgage application because its an additional debt. The banks would prefer to see a strong savings record without the debt.

If you could hold out a bit longer, its a lot easier to get a car loan when you have a mortgage, than get a mortgage when you have a car loan

Yea savings is better than a loan. The only thing good about a loan that you pay off is your credit rating may be updated. Either way you are showing repayment capacity so in that instance you are showing you can put X amount away per month, but that's only relevant if the loan is complete by the time you apply for the mortgage. If you're paying the loan at that point, they'll just deduct that amount you're paying from your repayment capacity