Loan Or Car Acquire Prepare?
I’m considering purchasing a car shortly, not a brand new car but one that is maybe a few years old. Therefore, given the current fiscal climate should I get a private loan to finance the auto or should I go for a newer car and a car purchase plan, or should I be sensible and save up for my brand new car!?
Let us look at the difference in those 3 options and what each path signifies for me. Firstly a private loan or unsecured loan. I don’t want a secured loan as it could be procured from the equity in my home and with 2 children to look after I think my house is more important than a great new vehicle! Say I am looking for #10,000 over 4 years, that is around #310 per month and more than 3 years it’d be about #240 per month. Overall not too bad but nevertheless a rather hefty sum to discover every month.
My next option would be a car purchase program, and these are usually only on brand new cars. You pay an initial amount that’s deducted from the entire cost of the car. The amount that’s left is split by the term which you opt to run your contract above and there is generally 8 to 10 per cent APR, Average added to the. You may choose not to make this payment but you have to return the car, then I’d be back to where I started, i.e. no car! The other option is to earn the last payment after which I can continue to keep the vehicle. Or I could get another brand-new car, once I’ve settled the current contract.
My issue with these strategies is that the car prices are rather steep. By way of instance, 1 car I have been considering is #21,000 list cost but you might purchase the identical car second hand, privately with 8,000 to 12,000 mileage for around #17,000 to #18,000. S O #4,000 depreciation over the first few thousand miles. That’s why I can not bring myself to get a new car.
My other alternative, obviously, would be to go the old fashioned route and save the money. I had been thinking that saving 50 per cent of this price would be a good idea, I could try and find an unsecured loan to another 50 per cent. This way if for any reason I cannot make the repayments I could choose to market the car and pay off any amount left on the loan. Then any amount I have left over I really could use to buy another vehicle, either a cheap second hand car outright or use the cash for a deposit on another car that costs significantly less.
That is all based on what I’m comfortable with repaying every month both in relation to what I can manage and what I think is reasonable to cover a car each month. Do I really need to spend more money on an automobile when fuel prices are rising and drivers are getting taxed more heavily annually…