Golf finance info

[STV4SYT]

No car is worth getting into debt over.

Sounds like you will be entering a black hole of repayments for the next 3 years.

What happens when you want to change again in 2 years.

Why not buy a 2nd hand Mk5 if thats what you can afford to??

[gerhard]

The GTI is worth it

No, it isn't - the GTI is just a car when you boil it all down.

Debt is a disease

Loans for housing are the only sensible loans, but even these are insane nowadays because people have forgotten the concept of a healthy deposit.

I suppose the thinking is "I can't afford to repay $X,000, so I might as well borrow $4X,000"

[elisiX]

I have no issues with financing a vehicle - that's not the point of my comments.

I just feel that if you are already upside down on a loan, putting that negative into a vehicle is a very bad idea as it will only accumulate.

I'm going to be financing my GTI or R.. but no more than 90% of the purchase price to give myself a little head start.

[Allegiance]

Actually the way it has ended up with discounts and the way I am going to be doing the loan means the loan amount will be for the retail price of the car.

So in terms of the loan it's as if I purchased the car without a discount. The final loan price won't be greater than the value of the car.

Also my new loan will be at 7.46% P.A. whereas my last unsecured loan was 15.7% P.A so it works out alot better.

[elisiX]

Yes mate but your paying full retail on a car which is going to start depreciating from the regular discounted price on the market (even less than that even).

Therefore you are left with a significant shortfall. Unless you pay over the minimum for the car repayments, its going to be painful come resale.

To lay this out; All assumptions.

$50,000 car loan (inc $5k 'discount')

Car begins to depreciate from $45k.

Resale time and the car is worth $30k but you still owe $35k-$40k.

[gerhard]

Yep, on a $50,000 car fully financed you are financing the Dealer Delivery $3000, the GST $4500, the dealer profit margin $3000, the registration, and the stamp duty.

A $35,000 "asset" financed happily at $50,000.

I can't get my head around that at all.......

[SpeedBird]

Yep, on a $50,000 car fully financed you are financing the Dealer Delivery $3000, the GST $4500, the dealer profit margin $3000, the registration, and the stamp duty.

A $35,000 "asset" financed happily at $50,000.

I can't get my head around that at all.......

Me too, Well said again gerhard, At the end of the day Ca$h is still KING! when buying any car and new especially.

" What the fool does in the end, the wise do in the begining! "

[flappa]

Makes no sense at all to purchase a brand new car with cash or in fact expensive personal finance. The moment you drive out the door your are usually $5k in the hole already and loosing money rapidly. The exception would be for business purposes.

Business or a Salary Sacrifice are the only real sensible ways to purchase a new vehicle.

Of course, if you are cashed up . . . . your money your choice.

[Brendan_A]

Makes no sense at all to purchase a brand new car with cash or in fact expensive personal finance. The moment you drive out the door your are usually $5k in the hole already and loosing money rapidly. The exception would be for business purposes.

Business or a Salary Sacrifice are the only real sensible ways to purchase a new vehicle.

Of course, if you are cashed up . . . . your money your choice.

Makes no sense what you have just said either. Cause I'm going to borrow $10k on a $38k car it's not sensible???

[flappa]

Whats so hard to understand ?

Paying Interest on a loan for a depreciating asset is never sensible.

Different when you can write off the difference on tax.

If someone chooses to purchase a brand new vehicle with cash or 100% finance, thats their decision . . . . your money your choice.

Is it sensible ? Not one bit.

[Brendan_A]

I bet more than half the people on this forum owe money a car. If you don't care what people do with there money why did you put your 2 cents worth on this thread?

[flappa]

As do I. In fact I was MUCH worse, because I used my housing loan to purchase a vehicle, because it was a vehicle I REALLY wanted.

I'm paying off a vehicle over 30 years . . . go figure

The point I was making was in reference to the OP. This person not only had an outstanding amount on an existing loan but was considering purchasing a new vehicle at 100% finance and thus digging themself a bigger hole on a depreciating asset. Is that really smart ?

Just consider why you are doing it or would a slightly older vehicle do the same job ?

[Brendan_A]

Yeah your right there mate. Not a wise move! I though you were saying all people borrowing money on a new car are silly. Sorry mate.

[flappa]

and my apologies.

Need to make sure my posts are clear in their intent.

[STV4SYT]

If someone chooses to purchase a brand new vehicle with cash or 100% finance, thats their decision . . . . your money your choice.

Is it sensible ? Not one bit.

Nothing wrong with Cash, im 32, and have never paid a cent of finance ever in my life, ive just bought my 2nd ever new car, had a new Motorcycle a few years back also but that wasnt the same amount of $$ as a car.

Have i driven some nasty cars in my time? you bet, but i bought what i could afford at the time, paid for them all in full, drove them til i could afford something better then changed it and gradually got to a stage where i can change my car every 2 years into another new one for not an extreme amount of money.

It did take me a few steps to get there, but id rather throw money into savings for the next one than be forced to pay $x a week for a car that to be honest is not essential.

I also use the car a bit for work and can still get a reasonable amount back in tax each year for usage.