Extend current loan or see it out?

Brett1102

Hi guys, I'm new here so hope I'm in the right place - I'll get striaght to it

I took out a 5 year loan for a car and currently have 10 months left to pay. I've been itching to get a new car for a while now but would need to take out another loan to afford it.

So I guess the advice I'm looking for is;
-should I wait my existing loan out until next year and apply for a new one, or;
-see if I can extend my current loan (loan is with sainsbury's - never missed a payment)

My only issues are that I feel my car may be getting a bit faulty (clutch slipping) and wouldn't want it to lose too much value over the next 10 months as I'd like to part ex it.

Any advice would be much appreciated.

Thanks in advance :j

[Deleted User]

Pay off the current loan, save up and then buy something else. Or even better, keep the old one running.

You definitely don't want to be paying loans for two cars, one of which you no longer have.

molerat

And ....... never take out a 5 year loan on a depreciating asset. You should only take a used car loan over 3 years max to avoid the situation you are in now.

Dobbibill

Repair the clutch.

Pay off the loan for the next few months.

Save, save, save for a new car..........a clutch slipping and an itching feeling you want a new car doesn't mean you have to change the car.

Brett1102

Thanks all for the replies, it's good to hear other peoples points.

I should have mentioned, I had the car when I was 23 (Seat Ibiza - 3 door) which after 4 years I feel have outgrown and would like something a bit more "adult" (5 door - more of a future family car). The Ibiza has been brilliant and I would be happy to keep it but I do think a change is needed within the next year or so.

The reason I'd be getting a loan is because my current savings are towards a house (hence why I can't save for a new car) and as I'm already paying out my existing loan it's money I don't think I would miss if I would be getting a new motor.

I think the best thing to do is wait it out and probably get a new loan once this one is paid up. Thanks again for all your input!

CLAPTON

Brett1102 wrote: »

Thanks all for the replies, it's good to hear other peoples points.

I should have mentioned, I had the car when I was 23 (Seat Ibiza - 3 door) which after 4 years I feel have outgrown and would like something a bit more "adult" (5 door - more of a future family car). The Ibiza has been brilliant and I would be happy to keep it but I do think a change is needed within the next year or so.

The reason I'd be getting a loan is because my current savings are towards a house (hence why I can't save for a new car) and as I'm already paying out my existing loan it's money I don't think I would miss if I would be getting a new motor.

I think the best thing to do is wait it out and probably get a new loan once this one is paid up. Thanks again for all your input!

when you apply for a mortgage, they will take into account whether you have a loan

[Deleted User]

Brett1102 wrote: »

The reason I'd be getting a loan is because my current savings are towards a house (hence why I can't save for a new car) and as I'm already paying out my existing loan it's money I don't think I would miss if I would be getting a new motor.

It's money you'll really miss when you can't get a mortgage for the amount you need though.

TrustyOven

Brett1102 wrote: »

I should have mentioned, I had the car when I was 23 (Seat Ibiza - 3 door) which after 4 years I feel have outgrown and would like something a bit more "adult" (5 door - more of a future family car).

While a 5 door car might seem a bit more "adult", you will not BE an adult by buying such a car.

Is your motivation really about "appearing to be adult"?

It reminds me when I was a teenager, and I wanted the latest stuff. Want. WANT. Want want want want. "itching". It's all about the want. And nearing the end of the current loan is the "justification".

So my advice is:

- Fix the clutch, and keep the car.
- Pay off the current car loan.
- Save hard for another car.
- Evenutally when you get 2-5k saved up for another car, buy it with your HARD EARNED CASH.

That way, you will:
- learn about keeping a car going
- remove one debt from your life (debts only cripple your future self)
- learn that it doesn't matter what others think about your posessions
- have the adult satisfaction that the car you buy later on and drive is from your own hard work, dedication and independence.

Moneycoach

All good advice before me, so I will keep it short.


1. What is your main priority saving for a house or a car?
You have a car that runs, why not change your car when you have your new house.


2. Paying off your loan frees up extra cash to repair the car or save for the house. If you won't miss the money, you can pay yourself a car payment each into a car fund or even better invest it for the long term.


3. Buy your next car with cash, it makes the most financial sense and you would not be in this position had you paid cash first time around... #just saying