Am I right to avoid getting a car loan?

fozmcfc

I'm not a driver and have no interest in cars, but my passion is computing.

Like cars, computers lose value extremely quickly, therefore the only way I would buy one on credit, would be with a 0% purchase credit card for as long a period as possible (providing no charge for using the card was levied by the seller).

It's the sort of purchase that if done on chargeable credit, will reasonably quickly end up be worth less, than what is still owing on finance, unless it's an extremely low interest % and a reasonable short period of credit.

thebritishbloke

bigadaj wrote: »

Makes no sense though, in most instances it costs more to borrow than can be earned in savings. If the car is on low rate finance then the cost is normally tied in the deal so it's always being paid for somewhere.

Depends entirely on the individual deal and retailer etc. Some manufacturers are now offering 0% finance, the cash price before is the same with or without the finance, if it's within your price range, financing it is costing you no more than paying in cash.

Even if I get a particular deal and end up paying £500 in interest, I'd rather do that than have to save my entire £20,000 deposit again.

bigadaj

thebritishbloke wrote: »

Depends entirely on the individual deal and retailer etc. Some manufacturers are now offering 0% finance, the cash price before is the same with or without the finance, if it's within your price range, financing it is costing you no more than paying in cash.

Even if I get a particular deal and end up paying £500 in interest, I'd rather do that than have to save my entire £20,000 deposit again.

Still a poor deal, and I'd prefer the £500 in my pocket.

Foxy-Stoat_3

Rich85 wrote: »

I'm still very nervous about getting a loan tho. Even though it's easily affordable

Why are you nervous if its easily affordable?

Loans for cars are best over 12 or 24 months to keep the interest low and the risk of still paying for something that's worth less than the balance of the loan should you have a total loss or if you have to sell it.

It may work out cheaper for you to take out a £7,000 loan instead of £5,000 and repay the £2K over a few months or to avoid penalties.

The interest rate is usually reduced for loans over £7,000 or £7,500.