Loan vs salary

Hepsta

Hi all I'm new to these forums and need some advice or maybe just some re assurance.

Me and my partner are looking soon at taking a car loan. Now we have no debts apart from a mortgage but as I'm a keen driver really fancy a new car worth around 30-35k.

We will not be saving up the full amount but would like to see around a 15k sum saved and the rest 20-25k as a loan.

Now my question is after all our bills have been paid, our net salary is around £2500 each month. Are we being realistic having loan payments of around the £400 a month mark.

What is an average percentage of your disposable income that you would consider sensible to use on loan payment?

Thanks

Matt

BugsyBrowne

Get the same car but 4 years older then you won't need to borrow.

Hepsta

BugsyBrowne wrote: »

Get the same car but 4 years older then you won't need to borrow.

Good thought but not an option.

pc1271

As long as you've done a proper budget and you truly have well over £400 disposable income then it's not a problem. You will always spend your disposable income on something fun, be it meals out, holidays, a new TV, etc. If you're happy to spend it on a car instead of those other things, then enjoy it and don't feel guilty.

When looking at your budget, don't forget about things like some regular savings for a rainy day, Christmas next year and a potential increase in your mortgage rate! If you're not on a long fixed rate, chances are it will go up before the car is paid for. You should also think seriously about overpaying if you have £2500 spare cash every month. There is a good tool on this site to help with properly assessing your budget.

OneLife_OneShot

Why a 35k car? Why not a 15k one?

BugsyBrowne

Hepsta wrote: »

Good thought but not an option.

What motor are you looking at?

forgotmyname

It will depend on the lender and the interest rates. If you have a payslip there are places that will give you a loan.

But paying £7000 for a cars thats worth less than £2500 may not be what you want.

Hepsta

Car in question is a new BMW m135i.

I'm more worried than anything. I've never really owed that kind of money. Yes I am confident I can pay the loan and still have spare cash to enjoy other things.

Current car is worth £6000 so I would sell this and save some more for the deposit. I don't drink and don't smoke, most people I know must spend at least £300 a month on fags and drink alone, so this is one way to look at it I suppose.

OneLife_OneShot

If you can afford it go for it, if you don't have any outstanding debts apart from the mortgage I don't see why not!

BugsyBrowne

Hepsta wrote: »

Car in question is a new BMW m135i.

I'm more worried than anything. I've never really owed that kind of money. Yes I am confident I can pay the loan and still have spare cash to enjoy other things.

Current car is worth £6000 so I would sell this and save some more for the deposit. I don't drink and don't smoke, most people I know must spend at least £300 a month on fags and drink alone, so this is one way to look at it I suppose.

Very nice choice indeed.

Ps a 5 series is my preferred choice.

Carlos77

Hepsta wrote: »

Car in question is a new BMW m135i.

If you must spend that cash on a car, a used M3, or M5 is by far the way to go rather than the new M135i

(speaking as an M3 driver, so prob a bit bias!!)