Using ISA for new car

mordent_smiley

I'm probably being really stupid but...My other half wants to get a new car. He's got a good deal for a second hand octavia estate and he wants to use money in his isa to pay for it. His isa rate is 1.5% but once he's taken the money out obviously he can't replace it. The best loans appear to be about 7.8%. I'm just worried that if he uses his isa that in the future we'll regret it. It's about £7500 that he'd take out. I'm confused thanks for any comments.

dwsjarcmcd

It does make financial sense given the rates. Why not suggest that he deposits the equivilent of his loan repayments monthly into a new ISA (assuming he hasn't used this years allowance) and he could get a rate around 3%. If he has, he could still replace the money at 2.5% in a normal instannt access or even higher in a regular savings product.

Tell him he can use this towards his next car!!

mordent_smiley

I will! Thanks

cocktail

provided you guys have enough other savings , go for it.
interest rates go up and down. ahh! but the feeling of buying the car you want(without a loan).Priceless.