To use loan or savings?

walrrrus

Hi

I need to buy a new (used!) car. My current one is about to give up the ghost and I need it travel to work every day. I have savings in the bank intended to use for a deposit on a flat/house. Asside from my rent, I have no debts.

Should I use some of my savings to buy a car or should I leave it in the bank and take out a car loan? If I use the savings it'll take me a long time to build it back up to the current level and if I see somewhere I like I wont have enough for a deposit - but I'll be debt free. or do I take out a loan, keep my savings for a deposit but owe the bank for my car?

Suggestions welcome!

nomoneytoday

What is your savings rate (3% ?) and what price would a debt be ( 8% ?)
Go with the cheapest, and then put the monthly cost back to your savings...