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Nearly Mortgage Free but need advice!
donstermonster
Posts: 427 Forumite
I have been really overpaying for almost 3 years and now owe just £7200 and i am paying £1250 minimum per month so probably just 5 - 6 months away from being mortgage free - hooray !!!
But i need a new car now and i so want a particular car that is £20k
I can easily borrow the money and pay off at same rate as i am paying my mortgage off - i can even take the money back without penalty as i have overpaid so much and only pay 4.89 percent interest
Should i go for it - but psychologicaly feel i will not be mortgage free until the car is paid off or just buy a much cheaper car and be mortgage free in a few months???
But i need a new car now and i so want a particular car that is £20k
I can easily borrow the money and pay off at same rate as i am paying my mortgage off - i can even take the money back without penalty as i have overpaid so much and only pay 4.89 percent interest
Should i go for it - but psychologicaly feel i will not be mortgage free until the car is paid off or just buy a much cheaper car and be mortgage free in a few months???
donstermonster 
0
Comments
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I think you know the answer from a MSE point of view.
Buying an expensive and hugely deflating assest with borrowed money isn't the smartest move IMO.
If you're that insecure/pretentious that a flash new motor will make you feel better about yourself, then you may decide it's worth it anyway.
You are doing well paying off your mortgage. Why not pay off and then save? You'll have a decent lump sum in no time and you may even find that carefully saving makes you value your money more than credit (debt) and find it hard to waste it so freely when the time comes.0 -
It would take you around 2 years to save the money to buy this car outright. How long to pay for the loan?
Really it depends what else you could do with the money- kids in uni etc. Only you know whether or not you have bigger priorities than a swanky new motor.
How about getting a 4 year old one? Won't depreciate so quickly.Debt: 16/04/2007:TOTAL DEBT [strike]£92727.75[/strike] £49395.47:eek: :eek: :eek: £43332.28 repaid 100.77% of £43000 target.MFiT T2: Debt [STRIKE]£52856.59[/STRIKE] £6316.14 £46540.45 repaid 101.17% of £46000 target.2013 Target: completely clear my [STRIKE]£6316.14[/STRIKE] £0 mortgage debt. £6316.14 100% repaid.0 -
donstermonster wrote: »Nearly Mortgage Free but need advice!
But i need a new car now and i so want a particular car that is £20k
Don't buy a £20k car it's a waste of money. plenty of good cars much cheaper that will do the job.
With a surplus income of over £1k per month you need to look at how to save/invest this,
Have you have been using you ISA aloowances up to now to avoid future tax on savings?0 -
:question: I can't decide whether this is a wind-up or not - thats my initial reaction. Martin's ethos on mse is not to live life frugally but to live financially to the best value that you can. So, what would be the financial deal you could get on buying this car?
*My* opinion: ecologically unsound to buy what sounds like a whizz bang car - but you would need to look at your own ethical opinion about that. Financially, it doesn't make sense to buy a depreciating asset with borrowed money, as pointed out. And you say you *need* a new car and *want* this one .... thats a pretty big want. I think if you went ahead, you'd really enjoy it for a year, and then regret that you'd done it, thats my honest opinion.
I hope you can go forward in the way thats best for you.2023: the year I get to buy a car0 -
Thanks everybody that has helped.
I know it is not MSE savvy to buy a depreciating asset i guess i was thinking , i have done really well with paying off my mortgage(nearly) that i will "reward" myself but all the posts, especially Karmacat has made me think a bit more about it
I need a new car as mine has a problem that will cost more to resolve than the car is worth and i guess i was thinking why not get the one i really want rather than make do as i have been doing whilst concentrating on paying off my mortgage
I guess what i am hearing is live a little not live a lot until financially you are in a position to do so after sorting out all the other prioroities
cheers everybody, certainly time to put my thinking cap on !!!donstermonster0 -
You can pick up a great car for £2K or less, that will be reliable, go like stink if you want it to, and probably fit golf clubs or a weeks shopping in the boot, whichever you need.
Why not wait and save that £1250 a month after the mortgage is paid- and imagine the look on people's faces when you tell them you paid cash for the car with the money you once paid out on your mortgage- and even then I'd buy a year-old model and put a private plate on it so not many could tell the difference- "MFI 3 4U" would be a good plate-
Member of the first Mortgage Free in 3 challenge, no.19
Balance 19th April '07 = minus £27,640
Balance 1st November '09 = mortgage paid off with £1903 left over. Title deeds are now ours.0
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