Need advice on car loan

vibez

I'm looking at buy a car for around £6000.

I have a few options.

1) Add the sum to my mortgage
2) Take out a loan @ 5.7% over 5 yrs
3) Buy a car from those ads you see on tv where you get 0% APR for 5yrs


Which would be the best deal? Obviously 3 looks great, but there must be a catch, right?

Anyone else investigated these 3 and picked a particular one for a car loan?

nomoneytoday

The 0% loan car will probably be more expensive, or the dealer won't discount as much. The dealer has to make the money somewhere...

As for the mortgage, will you overpay? Otherwise you may end up paying for a car for 25 years :eek:

vibez

Thanks for the reply.

I agree that the 0% loan will have a hidden catch. I'm guessing the price of the car will be more and there will be strict terms and conditions.

I probably won't over pay on the mortgage so it will cost me more in the long run

I have found a new offer, my mortgage company is willing to offer me a loan at the same rate as my mortgage, but over 5 yrs. The only catch is that if interest rates rise, so will my repayments.

So either I get a fixed loan at 5.7% or take a gamble and go with my mortgage companie's loan and hope rates don't rise higher than 5.7%.

I assume loans from banks etc have a fixed interest rate?

Stonk

You forgot option 4: save! Seriously, have you worked out how long it would take, compared to when you actually need this car? Saving for it is by far the cheapest way to pay...

vibez

Yeah it will take me around 5 years, or around 2 If I gave up my social life, which would include getting to work. Not to mention I am the worlds worse saver.

I know that is the best option, but my current car is costing me a fortune to keep on the road and its wasting my money much more than a loan.

Thanks for the advice though, where were you around 5 yrs ago