Cheapest car loans for $5k?

Forums › Transport (cars, bikes and boats) › Cheapest car loans for $5k?

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6309 posts

Uber Geek

#1500683 28-Feb-2016 12:15

This idea of swapping CCs sounds interesting, its perfectly legal?

Also which check is better the AA or VTNZ? the AA seems to check less stuff and Im not sure if they put the car up on hoist like the VTNZ does for underbody.

gzt

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#1500690 28-Feb-2016 12:18

Some issues with credit card. Dealer is charged a few percent for the transaction. So in terms of making an offer that changes the dynamic a bit.

Buying with credit card privately you would use cash advance. There is no interest free period on cash advance. Also does CA make a difference for balance transfer? No idea myself.

Edit: I see both points covered in earlier posts : ).

TeaLeaf

6309 posts

Uber Geek

#1500697 28-Feb-2016 12:28

Hmmm a lot to think about re credit card.

Thanks all, that about does it as far as what I need to know.

chevrolux

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#1500751 28-Feb-2016 14:15

All the people saying 'don't buy if you dont have the cash'.... do you own a house? If yes, did you pay cash? if yes, I want your job/pay packet.

Taking out a loan on a car is no worse than taking out a mortgage. As for the cost of interest, perhaps the OP values there comfort/enjoyment over a few hundred dollars - an extremely good reason to spend a bit more on a car.

Marac is who we do our vehicle leasing through at work. I think they do personal vehicle loans too. Very easy to deal with and have lots of partners you can buy from.

blackjack17

1704 posts

Uber Geek

#1500763 28-Feb-2016 14:40

chevrolux:

All the people saying 'don't buy if you dont have the cash'.... do you own a house? If yes, did you pay cash? if yes, I want your job/pay packet.

Taking out a loan on a car is no worse than taking out a mortgage. As for the cost of interest, perhaps the OP values there comfort/enjoyment over a few hundred dollars - an extremely good reason to spend a bit more on a car.

Marac is who we do our vehicle leasing through at work. I think they do personal vehicle loans too. Very easy to deal with and have lots of partners you can buy from.

Houses generally appreciate in value and are an investment /essential

Cars generally depreciate in value and are a tool/luxury/recreation

Houses once you have paid them off give you a rent free place to live for the rest of your life

Cars once you have paid them off generally need replacing/will continue to depreciate.

Mortgages typically have a low interest rate

Car loans have a high interest rate

There is a big difference between home loans and car loans

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gzt

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#1500776 28-Feb-2016 14:58

Yes that is very easy to understand. On the other hand there can be many good and valid reasons to take a car loan when you have already have savings.

empacher48

367 posts

Ultimate Geek

#1500801 28-Feb-2016 15:48

Be wary of cash advances on low interest credit cards. Although ASB low interest is 13.5% or there abouts with 55 days interest free, if you take a cash advance you pay 22% interest from the day you with draw the cash..

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Geekzone

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#1500807 28-Feb-2016 16:17

I didn't mention this because I though people would know cash advance pays interest from the day you get the money out, not from the invoice date.

k1w1k1d

1492 posts

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#1500853 28-Feb-2016 17:06

A $5000 loan over 12 months is going to cost about $1000 for interest and fees if you have a good credit rating. That's about $20 a week.

Is $20 worth the hassle of breaking investments, changing credit cards, etc?

GregV

928 posts

Ultimate Geek

#1500856 28-Feb-2016 17:10

You're not changing credit cards, you're just obtaining a new one specifically to get the IF term on the transferred balance. If I did this, I would carry on using my existing CC as I do now, and cancel the new one after the 'loan' was fully paid.

I'd happily do this to save $1000 in interest costs

Aredwood

3885 posts

Uber Geek

#1500981 28-Feb-2016 21:15

TeaLeaf:

This idea of swapping CCs sounds interesting, its perfectly legal?

Also which check is better the AA or VTNZ? the AA seems to check less stuff and Im not sure if they put the car up on hoist like the VTNZ does for underbody.

Neither. Goto the dealer for the brand you are thinking of buying. Or a mechanic that specialises in that brand.

mattwnz

20108 posts

Uber Geek

#1500992 28-Feb-2016 22:01

As others have said, it doesn't make sense to borrow to buy a depreciating asset. You are better to lend yourself the money from your savings, if that makes you feel better about losing those savings. The only time you wouldn't do this, is if the interest on your savings is more than the interst and costs associated with your loan to buy the car. But I very much doubt it would be as savings interest rates are rock bottom at the moment,

mattwnz

20108 posts

Uber Geek

#1500993 28-Feb-2016 22:02

gzt: Yes that is very easy to understand. On the other hand there can be many good and valid reasons to take a car loan when you have already have savings.

Only if it is locked in, or is paying a great rate of return than is better than the borrowing rate.

kingjj

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#1501069 28-Feb-2016 23:12

Back to the OP's initial question, we got a loan from GE at 12% a couple of years ago for $6500 on a 2 year term. Like the OP was considering it was for a topup on top of money set aside for a car. We choose to do it this way and pay the bit extra in interest for 2 reasons: 1. We didn't want to replace one cheap car with another and than have to consider doing it again in 2-3 years and 2. We didn't want to raid our savings as we have that set aside to allow my wife to stay home for as long as possible when we decide to expand the family.

OP if you want to get a loan to topup your spending money than do it. It's your guys money and you can do what you want with it. We feel we made the right call for us at the time and got a great modern car that will well outlast anything we could have afforded otherwise. GE money were surprisingly good to deal with (although it did take a week or so to get it all sorted). We negotiated a rate that we were happy with and made it clear we would walk away if we weren't happy. This got us a 12% rate (or more accurately 11.99%) which we were happy with and no establishment or admin fees for the life of the loan. We also negotiated no penalty for early pay back and paid the loan a lot quicker than the 2 year term. All up we probably paid around $600-700 in interest which was worth it to not raid our long term savings account (which earned a comparable amount in interest during that time anyway).

blackjack17

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#1501111 29-Feb-2016 05:34

kingjj:

Back to the OP's initial question, we got a loan from GE at 12% a couple of years ago for $6500 on a 2 year term. Like the OP was considering it was for a topup on top of money set aside for a car. We choose to do it this way and pay the bit extra in interest for 2 reasons: 1. We didn't want to replace one cheap car with another and than have to consider doing it again in 2-3 years and 2. We didn't want to raid our savings as we have that set aside to allow my wife to stay home for as long as possible when we decide to expand the family.

OP if you want to get a loan to topup your spending money than do it. It's your guys money and you can do what you want with it. We feel we made the right call for us at the time and got a great modern car that will well outlast anything we could have afforded otherwise. GE money were surprisingly good to deal with (although it did take a week or so to get it all sorted). We negotiated a rate that we were happy with and made it clear we would walk away if we weren't happy. This got us a 12% rate (or more accurately 11.99%) which we were happy with and no establishment or admin fees for the life of the loan. We also negotiated no penalty for early pay back and paid the loan a lot quicker than the 2 year term. All up we probably paid around $600-700 in interest which was worth it to not raid our long term savings account (which earned a comparable amount in interest during that time anyway).

Where are you getting 12% on savings? I want some of that action

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