Help a young man with a decision..

[iwfc]

Hey all,

So here's my dilemma - I'm currently torn between the heart and common sense. Situation is this: young man, 24 going on to 25 in January, gross salary of 75k+, currently drives a (hold your giggles) 2008 Suzuki Swift, and wants (and has wanted for a while now) to own a VW MkV GTi (with leather, in white please, and a sunroof would be amazing), but also wants to have enough dough to buy a 2 bedroom apartment next year. His greatest initial fear of not taking the plunge was the difficulty of selling his Suzuki and maintaining 2 cars at once, however the opportunity of a family friend wanting to buy the Suzuki has emerged. What should he do, and how much should he be spending if he decides so?

I know that this is a VW forum and chances are that the answers will be biased , but I don't want to be "just another Gen Y". Life advice counts!

Thanks in advance

[stickshift3000]

Sell the swift.

Buy a pushbike and pay off your flat quicker.

[poyta]

Keep the swift, buy the apartment first - if you can still afford the GTi after that then buy one. Priorities my friend.

[jessv3]

You haven't really mentioned what savings you have. I personally rarely have any savings and I am around your age and have had a Mkv GTI for almost 2yrs now, which I pretty much own in full. However unlike many of my friends I don't have a mortgage, I was happy to hold off on that 30yr commitment in loo of buying a nice car. There is no reason why you cant buy an Mkv now, and in 2 years time buy a unit, or alternatively buy the unit now and keep your swift, it really depends where your priorities are at.

[iwfc]

You haven't really mentioned what savings you have.

Savings wise, I have about 30k in the high interest account, 15k in one of those first home owners account, no debts, and about 5k in stocks (which is dwindling down to nothing)-- so not too bad.

My aim was going along the lines of this - use 10k of cash, 11k from the Swift, take a loan of 10k and pay it off in under year (CUA seems to have a very tempting car loan scheme).

Crazy how I just typed my finances, but shows how serious I'm taking this decision .

[Ideo]

Do whatever you feel is right for you. Not what some nameless, faceless person on a forum tells you.

Property is overrated as an investment. The only reason it is attractive is because of a pathetic taxation system designed to help baby boomers.

If I was you I'd sell the swift, use that money to have a decent overseas holiday and then consider whether you want to enjoy life while you are still young, and have the odd overseas trip, or be that friend who never goes out because every last cent goes on a mortgage.

[jazd]

You haven't really mentioned what savings you have. I personally rarely have any savings and I am around your age and have had a Mkv GTI for almost 2yrs now, which I pretty much own in full. However unlike many of my friends I don't have a mortgage, I was happy to hold off on that 30yr commitment in loo of buying a nice car. There is no reason why you cant buy an Mkv now, and in 2 years time buy a unit, or alternatively buy the unit now and keep your swift, it really depends where your priorities are at.

You are ringing some bells there, I am the same age too and have no savings, no mortgage, just a car loan. Gotta have fun while you still can!

Buy the MkV, they are so cheap now.

[Drift]

The car can wait. You already have a usable car thats only a few years old but you don't have your fingers in the property pie. When I was your age (about 10 years ago), I had a brand new car, jetski, motorbike and was renting a flash pad in a flash suburb. The place I was in came up for sale and had I not had all my toys, I'd have been able to afford to buy it. The place doubled in value inside 5 years and I'd just bought an average home in an average suburb for more than what I'd have paid for the first place.

If I had my time over, I wouldn't do it the same way. Although I've got my toys now and property, I'd have been out of debt completely right now inlcuding a wholy owned property, instead of having a mortgage. There's plenty of time for toys and there'll always be somethine better faster and more sexy just around the corner. Property however always increases in value even though the increase has slowed in recent years.

[Wolfgang]

I was in the same dilemma a couple of years ago at age 26, heart wanted a MkV GTI, head said property. Then found out my job was ending in a about year, so I thought I'll have some fun and won't commit myself to a mortgage yet so I spent some of the sizable deposit I had on the Golf and an overseas trip (and another a year later, goodbye redundancy and then some). After looking at property prices a few weeks ago I wish I had bought back then. Now when I take the plunge it looks like the Golf is going to have to go to help with the deposit that I'm still trying to get back to where it was.

Guess it comes down to what is important to you in life. 25 is still young, property is a big financial commitment. While I regret not buying a property back then, I'm richer for the experience heading on an overseas trip (or two), something I couldn't of done with a mortgage.

[benough]

Houses will always be there, your youth won't.

Also the prices are going to go down anyway. $10k is a small gap to wait for a car your heart has always wanted.

Hurry up and buy!

[TomC]

There's plenty of time for toys and there'll always be somethine better faster and more sexy just around the corner. Property however always increases in value even though the increase has slowed in recent years.

I'd probably agree with this advice. Even if you bought a house now and bought a GTI in 10 years (an MK7/8 by then no doubt ) you'd still only be in your mid-30's, hardly over the hill!

Sure house prices have slowed and it might not be the most aggressive investment, but if you are planning on living in the house then the investment factor only makes up part of the decision to buy. If you hate renting, want your own place to come and go and change as you please, then there is some emotion involved in your purchase.

If you are buying a flat simply as an investment, well maybe that's a different story

[jessv3]

I'd probably agree with this advice. Even if you bought a house now and bought a GTI in 10 years (an MK7/8 by then no doubt ) you'd still only be in your mid-30's, hardly over the hill!

By then a GTI will probably be too refined and common to be fun like they are now. Thats why I am taking the most of having a turbo petrol who knows what will happen in a few years, a hybrid GTI maybe all thats available

[DkN]

house prices 5 / 10 years ago is not comparable to what it is now at all. Yes it's doubled or in some cases even tripled since then, but the result is some areas of melbourne and sydney have among the highest house prices in the world - it really isn't going to go up anywhere anytime soon. The OP is in Brisbane, and I can tell you if you waited a year or so you'd probably actually see lower prices. Think of it as stock that's climbed crazy fast in a relatively short period.. You don't want to buy when it's at the tip of the price curve.

There's, no doubt, lots of regrets for people who didn't buy a house 5 or 10 years ago but it's rather misleading to apply that to the current situation...

Rationally I would say each choice is as good as the other. Your enjoyment is worth something too, it's not always the money, and it sounds like you're doing pretty well financially anyway. So.. go with your heart

Besides, who knows what's gonna happen in 10 years. Maybe you'll be on $200k a year and buy Audis for toys, or maybe you'll lose your job and drive an 87 Daihatsu. It's great to plan ahead but at the same time don't lose sight of youth - that's my philosophy anyway, I'm still young (probably too young to give any advice at all )

[iwfc]

Thanks all for your wise thoughts and opinions .

I am ever so tempted in following the heart because after doing some rough math, I figured that the ride would put me off buying the place by about 6 or 7 months, which isn't too long considering my First Home Account only matures in July next year (4th year rule) -- and instead of renting, I might (sigh) move back with the old folks for 4 or 5 months (they would love that, seriously) to save that extra bit of coin.

The car that I have my eye on is this (2008 VOLKSWAGEN GOLF GTI DSG PIRELLI V MY09 Cars For Sale in NSW - carsales.com.au - carsales.com.au). Is this a good deal? How much should I be expecting to be paying for something like this? How much can you haggle off the dealer? From what I hear, things are getting desperate (fear of a second dip financial crisis etc).

I am in no real rush, and if it goes before the sale of my Swift, it goes and so be it. .

[Transporter]

Thanks all for your wise thoughts and opinions .

I am ever so tempted in following the heart because after doing some rough math, I figured that the ride would put me off buying the place by about 6 or 7 months, which isn't too long considering my First Home Account only matures in July next year (4th year rule) -- and instead of renting, I might (sigh) move back with the old folks for 4 or 5 months (they would love that, seriously) to save that extra bit of coin.

The car that I have my eye on is this (2008 VOLKSWAGEN GOLF GTI DSG PIRELLI V MY09 Cars For Sale in NSW - carsales.com.au - carsales.com.au). Is this a good deal? How much should I be expecting to be paying for something like this? How much can you haggle off the dealer? From what I hear, things are getting desperate (fear of a second dip financial crisis etc).

I am in no real rush, and if it goes before the sale of my Swift, it goes and so be it. .

If you ask me, it's not a good deal and I even didn't open the link. You're replacing secondhand car with another secondhand car and want to buy a house. Getting a new car and keeping it for longer to pay the house off sooner makes more sense to me.

Good luck with the decision!