Finance for new Car

caoimhe_kelly · 09-11-2021 4:24pm #1

Looking to purchase a second hand Ford S Max car for our family which will cost about €30k . Wondering should I take out finance when buying it or instead use a chunk of our savings to purchase it?

db · 09-11-2021 4:27pm

Use your savings and pay back as if it were a car loan. The money sitting in the bank is earning you nothing so if you pay back with the same interest you would pay on a loan at least you will get 5-6% growth.

Allinall · 09-11-2021 4:27pm

If you don't think you will need the €30k over the next 4 or 5 years, then pay up front for the car.

You're money is earning nothing in the bank, and a loan will cost you in interest.

Does the €30k represent a large proportion of your savings?

Are you saving for anything specific?

These are the things you need to take into account.

Buddy Bubs · 09-11-2021 4:30pm

How long is a piece of string, Caoimhe? Completely depends on your circumstances what you should do. But if you have a whole pile of cash sitting there doing nothing and no plans for it and being eaten by inflation at the moment then use it to buy the car.

Taking everything else out of the equation like making sure you're funding retirement etc...leave yourself with a rainy day emergency fund of 3 to 6 months salary on demand in easily accessible account and use the rest to part pay the car. If there's enough left over after rainy day fund put away and other things taken care of, buy the car outright.

You won't be getting great interest rates anywhere on a used car so the finance will cost a right few quid.

caoimhe_kelly · 09-11-2021 5:16pm

30k is about half our savings and have no plans to use it for anything specific over the next 3-4 years. Based on the feedback you all have provided I wont go for the finance option so. Thanks for the quick replies

Squozen · 10-11-2021 9:32am

I'd say if €30k is half your savings you are paying far, far too much for your car. I bought an old Megane for €3800 which gets me where I'm going just as well as a €30k car. I'm not saying you should buy something that cheap, but do you need to spend €30k? Would you not be better off buying something for €12k and keeping €5k aside for maintenance?

caoimhe_kelly · 10-11-2021 11:46am

https://www.boards.ie/discussion/comment/118144602#Comment_118144602

We are a 1 car family so don't mind spending a bit more than i usually would on a car. A car breaking down with 4 kids in the back or giving trouble is serious hassle if you've no second car to easily fall back on

Ash.J.Williams · 10-11-2021 11:49am

https://www.boards.ie/discussion/comment/118142066#Comment_118142066

30k is far too much for a 2nd hand car

Jim2007 · 10-11-2021 5:22pm

https://www.boards.ie/discussion/comment/118145157#Comment_118145157

You want to pay 30k for a fallback car…. Would a cheaper new car not be more reliable? When you say you have 60k in savings, I assume you have a separate rainy day fund, right?

Allinall · 10-11-2021 5:27pm

https://www.boards.ie/discussion/comment/118145180#Comment_118145180

That's quite a bizarre statement to make.

It may be for some people, but not for others.

Ash.J.Williams · 10-11-2021 11:01pm

https://www.boards.ie/discussion/comment/118147059#Comment_118147059

second sentence true , I should have stated in my personal opinion,

it really wasn’t bizarre though

Finance for new Car

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