Car Finance Help

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Batman

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#1250511 3-Mar-2015 19:38

sep11guy: Thanks for your replies guys, you have been of great help !

Just for a moment, ( and slightly off topic ) looking at a different perspective and trying to understand how do others view this.

What do you think one should spend on a car , given one has same circumstance - one couple (2 ppl) with one kid, 2yrs old , but with varying household income :

1 ) 1 earner at 55k

2) both earning at about 80k together

3) both earning 120k together.

3) single parent earning 95k ( just a diff scenario , to see how it differs from top )

this is a silly question. the answer is depending on how much debt you already have, how much debt you want to have, and how much other debt you are about to take on

debt you already have
- mortgage
- student loan
- etc

debt you are about to have
- mortgage
- having babies (they cost more than you can ever imagine)

how much debt you want to have
- me: ZERO
- some people: as much as the bank will allow

Batman

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#1250512 3-Mar-2015 19:39

i suggest for your friend they buy a honda jazz for $5k as new. but as you can see i hate debt. like a dog collar around your neck.

jpoc

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#1250569 3-Mar-2015 21:11

sep11guy: Thanks for your replies guys, you have been of great help !

Just for a moment, ( and slightly off topic ) looking at a different perspective and trying to understand how do others view this.

What do you think one should spend on a car , given one has same circumstance - one couple (2 ppl) with one kid, 2yrs old , but with varying household income :

1 ) 1 earner at 55k

2) both earning at about 80k together

3) both earning 120k together.

3) single parent earning 95k ( just a diff scenario , to see how it differs from top )

I have the same answer for all cases.

Budget $5000 and look to spend $3000 on a mid-late 90's Toyota Celica. The remaining money is to spend on a new cam-belt and tyres (if needed) and a full service and replacement of all rubber hoses, flexi brake lines and HT leads.

You will get abs and driver's/passenger's airbags plus huge crumple zones to protect you in the event of front or rear impacts. (That long bonnet and huge boot space are very handy that way.)

Super reliability, comfort and practicality too.

Batman

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#1250580 3-Mar-2015 21:36

umm ... i think they have a baby

Aredwood

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#1250605 3-Mar-2015 22:00

jpoc:
sep11guy: Thanks for your replies guys, you have been of great help !

Just for a moment, ( and slightly off topic ) looking at a different perspective and trying to understand how do others view this.

What do you think one should spend on a car , given one has same circumstance - one couple (2 ppl) with one kid, 2yrs old , but with varying household income :

1 ) 1 earner at 55k

2) both earning at about 80k together

3) both earning 120k together.

3) single parent earning 95k ( just a diff scenario , to see how it differs from top )

I have the same answer for all cases.

Budget $5000 and look to spend $3000 on a mid-late 90's Toyota Celica. The remaining money is to spend on a new cam-belt and tyres (if needed) and a full service and replacement of all rubber hoses, flexi brake lines and HT leads.

You will get abs and driver's/passenger's airbags plus huge crumple zones to protect you in the event of front or rear impacts. (That long bonnet and huge boot space are very handy that way.)

Super reliability, comfort and practicality too.

The problem is that you are still recommending a 15 to 20 year old car. Yes they were a reliable model and often still are. But things will still fail on any car of that age. Which is all good if you can do repairs / servicing yourself. Also fuel economy wont be as good as a modern car. Which will be a big thing if you drive alot. But if it only gets used a little bit, then often fuel will only be a small part of total ownership costs. With any old car like that you either need to buy the manual gearbox version. Or allow to either replace the auto gearbox or dump the car for scrap if the gearbox fails.

Part of the problem is the govt tightening up on rules for used imports. This means almost any car that has valid WOF/Rego and runs is worth at least $1000. And this is even worse for Vans / Utes / Light trucks. Which is why you still see so many both really old and high mileage (and unsafe) ones on the road still. Despite them being owned by companies.

Myself - I still have a 1989 Corolla. As I can do all the repairs on it. And when I was still an employee, the company van was a Mitsubishi L300 - Which has a worse crash safety rating than even the 89 corolla. So very little safety benefit in replacing the corolla. And now Im self employed I own a far safer Van. But can't afford to replace the corolla yet. And because I still don't drive the corolla much, Whatever I replace it with Will have a big deprecation cost to it.

KrazyKid

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#1250613 3-Mar-2015 22:10

I'm Boring.
For Work out a Budget and see how much you can afford to spend.
Doesn't have to be hugely detailed, but try and be realistic.<
Think about what your weekly costs are - do you want to go out partying each week with your disposable income or have you a saving goal?

It so depends on on where you live (houses in Dunedin are cheaper than Auckland and transport distances are less) if an income is good news or poverty.

Once you know what money you have left to spend on loan costs you can see if the car of your dreams matches reality.
But whatever you do - for the love of god don't buy a car with credit card debt!!!! OMG NO!!!

I have no problem in someone spending 20k on a great car if the can afford it and cars are their thing.
I'd never but luckily not everyone is like me.

jpoc

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#1251089 4-Mar-2015 15:23

joker97: umm ... i think they have a baby

Plenty of room in the back of a Celica. With my stepson in the front passenger seat, his wife could fit in the back seat behind him and they are both over 6'6". Sure, that was not comfortable but they did fit. Kids up to mid teens will be no problem.

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#1251114 4-Mar-2015 16:06

jpoc:
joker97: umm ... i think they have a baby

Plenty of room in the back of a Celica. With my stepson in the front passenger seat, his wife could fit in the back seat behind him and they are both over 6'6". Sure, that was not comfortable but they did fit. Kids up to mid teens will be no problem.

Unrealistic unless the kids are older. Younger kids in two- or three-door cars would not be a fun experience; IMO unless the kid is old enough to do their carseat up themselves a 2/3-door car's not appropriate. Doing up our 3-year-old's car seat is tricky enough with rear doors!

Batman

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#1251115 4-Mar-2015 16:07

Thank you

JimmyH

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#1251305 4-Mar-2015 20:09

sep11guy:

So I have adviced him to apply for the 2nd banks credit card, and see what they can come up with.

[...]

2) run with what he has, and then save enough money so that he can pay upfront in a years time. and by the time, he will save even more , cuz the vehcile would have depreciated more ( or he can buy a better frills car for the same $$ )

OK, if he already has a car that is realistically usable for a few more years (as your post implies) then I would say that it would be close to insanity for him to get another credit card and max it out for an unnecessary upgrade. With a kid and, implied from your discussion, limited finances then his best option by far is not to pile on more debt. Instead he is better to use whatever cash he has to pay off his first credit card and other debts, and then start saving for a house or the new car (so he can pay cash when he has to).

Piling into expensive credit card debt for what now reads as a discretionary vanity purchase doesn't seem all that rational.

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