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Loans or Savings?
Looking at financing a car and could cover all cost via savings but do not really want to strip out all my reserves.
Given that there are loans at approx 3.3% or 3.5% and my Santander gives me 1.5%, there is clearly a cash differential on £15k but what is the perceived wisdom? Loan now or commit funds and rebuild over 2 years and look for a loan if required downstream?
Would a money transfer card, 0% but with maybe 1.69% transfer fee, be worthwhile and what is the typical limit?
Anything else I could consider to minimise total amount payable?
Cheers BB
Given that there are loans at approx 3.3% or 3.5% and my Santander gives me 1.5%, there is clearly a cash differential on £15k but what is the perceived wisdom? Loan now or commit funds and rebuild over 2 years and look for a loan if required downstream?
Would a money transfer card, 0% but with maybe 1.69% transfer fee, be worthwhile and what is the typical limit?
Anything else I could consider to minimise total amount payable?
Cheers BB
Your life is too short to be unhappy 5 days a week in exchange for 2 days of freedom!
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Comments
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Can you obtain finance for a car at 3.3%?0
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Looking at financing a car and could cover all cost via savings but do not really want to strip out all my reserves.
Given that there are loans at approx 3.3% or 3.5% and my Santander gives me 1.5%, there is clearly a cash differential on £15k but what is the perceived wisdom? Loan now or commit funds and rebuild over 2 years and look for a loan if required downstream?
Nothing guarantees you to get the advertised rate.
You would need to apply to get your own personalised rate.Would a money transfer card, 0% but with maybe 1.69% transfer fee, be worthwhile and what is the typical limit?
Worth considering if you can get the limit. There is no typical limit though, again this is all according to your personal circumstances.
Try getting some soft search quotes for the loan and/or CCs then weigh up your options.I’m a Forum Ambassador and I support the Forum Team on the Budgeting & Bank Accounts, Credit Cards, Credit File & Ratings and Energy boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
If you can't be the best -
Just be better than you were yesterday.0 -
Always use savings if you have them
The problem is the reason people dont like to use savings to make large purchases is because they have worked hard, sacrificed to build them up so when they need to spend all of them to buy a car it hurts as they have an attachment to the money and they know what they went through to save
yet when we take a loan to buy a car we dont see it as our now money we see it as our future money but we want the car now, so we say oh its only £xxx amount a month, i can afford that (trust me thats used to do)
we humans are brilliant in talking and justifying things to ourselfs when we want somthing
so just use the savings or better still buy a cheaper car or even better pay its towards the mortgage or retirement“People are caught up in an egotistic artificial rat race to display a false image to society. We want the biggest house, fanciest car, and we don't mind paying the sky high mortgage to put up that show. We sacrifice our biggest assets our health and time, We feel happy when we see people look up to us and see how successful we are”
Rat Race0 -
Only use a loan if you will not have a sufficient emergency fund in cash (the suggestion is generally 3-6 months worth of expenses) should you use the savings to buy the car.
If you have a credit card with a high enough limit for emergencies, with a lower standard APR than you can get car finance, use the majority of your savings (keep some back to cover minimum payments on the card should you need to use it.)0 -
If you're prepared to accept 1.5% on £15K you must also have £21K paying 3% at BoS and Tesco? And maybe some other accounts paying up to 5% AER.
So you clearly have adequate emergency funds already.
Therefore use the Santander cash.
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Go for a cheaper car so you still get to keep some of the savings.0
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This is an interesting read associated with the OP's question.
http://monevator.com/the-really-obvious-thing-we-all-forget-when-borrowing-money/
The article steers you towards using your savings before taking any other loan and then quickly re-build the savings pot.You should pay attention to the needs of the moment - otherwise there is no future. But to ignore the future is foolish - living solely for the moment leaves nothing for when the next moment arrives.0 -
Sorry for the delayed reply but cheers for taking the time and effort. I will read the link.
TaYour life is too short to be unhappy 5 days a week in exchange for 2 days of freedom!0
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