Bit of a pain buying a car...

Grumpy_chap

chubsta said:

The interest rate was still 2.9% but I was able to spread the payments over 84 months instead of the 60 that was the maximum for the £7500 loan I initially went for - it seems like a long time but is basically giving me lower payments for the first few months whilst I overpay and finish my mortgage and then I can overpay like mad on the loan and hopefully have it paid off in under 18 months.

Is the loan interest rate lower than the mortgage interest rate?  If it is the other way round, repay the loan first.

chubsta

Grumpy_chap said:

chubsta said:

The interest rate was still 2.9% but I was able to spread the payments over 84 months instead of the 60 that was the maximum for the £7500 loan I initially went for - it seems like a long time but is basically giving me lower payments for the first few months whilst I overpay and finish my mortgage and then I can overpay like mad on the loan and hopefully have it paid off in under 18 months.

Is the loan interest rate lower than the mortgage interest rate?  If it is the other way round, repay the loan first.

That does make more sense and is something I considered but I have been overpaying a fair bit on the mortgage in an effort to finish it and am only a few months away - the psychological aspect of no longer having a mortgage outweighs the minimal difference between the mortgage at 2.25% and the loan at 2.9%. If I had more on the mortgage I would certainly pay the loan off first but by paying the mortgage off it will then give me an extra £450 a month to put towards the loan after March 2022 at the latest.

ndf9876

Pleased to hear it all worked out well for you Out of pure curiosity : what did you get in the end?

chubsta

ndf9876 said:

Pleased to hear it all worked out well for you Out of pure curiosity : what did you get in the end?

Car wise - I got a Kia Sportage, whoever originally bought it must have had some spare cash because they specced everything, I know many people will scoff at Korean cars but this really feels like luxury to me, full leather, millions of buttons and options (many of which I have already turned off but are nice to have!) and it is still well within warranty which makes a big difference. Having gone from a Hyundai i10 it feels massive and is great for our dogs, I have some mobility issues with my knees and back due to a bad accident a year ago and it is much easier to get into and out of too, as well as potentially being as cheap to run as the i10 - £30 a year tax, and the listed MPG figures (...yes I know how inaccurate they can be so only time will tell but it is a good starting point) are even better than the i10 so hopefully it should not cost me any more.

I went for a loan over the maximum number of years - 7 - so that I had the smallest payments for the next 5 months whilst I finish the mortgage, then everything will be put onto the car loan and I anticipate it will be paid off within a maximum of 2 years, at which point I hope to hold onto the car for at least a further 8, so should hopefully turn out to be quite a sensible purchase.

Potentially I could have saved up for it but circumstances have changed somewhat in that daughter has just turned 17 and starting to drive - we were originally going to spend about £3-4000 on a car for her, which is the value of my i10 but decided we would feel better knowing the history of the car as don't want her breaking down anywhere by buying a bad car for her, so decided I should get a bigger one for us and she can have the old one, so effectively the £15,000 I borrowed is only extravagant to the point of £11000

Of course, whilst all the above is the official reason - dogs, economy, warranty, daughter etc - I know deep down the main reason for buying it was that I have always driven about in small, cheap cars and I have finally decided to treat myself a bit and wanted something 'nice' that is also practical. I could have gone down the brand-new German car route like so many of my colleagues but this is all I need and am loving it!

ndf9876

Brilliant - I think sometimes it's better to get something that bit newer with the warranty and reliability, and having been a passenger in one several times, the Sportage is a very nice place to be We found ourselves in a similar boat last year (needing a new family runaround after my wife's 12 year-old Corsa was showing its age) and seriously looked at the Sportage ourselves.

Anyway, I am starting to ramble, but once again it sounds like you got the very best deal and the car you wanted - enjoy!