Do you have a car loan or own outright?

[Floweryfields]

Just to clarify - I don't have any problem with loaning money for a car - I did for my second car (first was an old clunker I paid cash for) - I would never, however loan a ridiculously large amount of money to own a 'fancy' car or to keep up with the Jones' so to speak... I personally can't justify investing large sums of cash in something that loses money as soon as you drive it off the car lot.

[Miss.September]

We own both cars outright. Ford Territory 2010 and Toyota Camry 2008. Personally we wouldn't ever take out a loan to buy a car. An example why:
My brother took out a loan to buy a car, then sold it when he wasn't around to use it. He doesn't have the car but is still paying off 3/4 of the loan.

I'd say that he had a personal loan for this, as opposed to a car loan. We wanted to roll over the loan from one car to the other, and we were told by both the bank and the car yard that it's illegal, because the car is the security. If you sell a car that has money owing on it, then the bank can't claim the car if the loan is defaulted on. We had to pay out one loan, then sell the car, then get the loan for the second car. So we still rolled it over as such - the amount didn't change, we just had to pay one out.

[Rosey]

Ugh, and this is why I should never participate in threads like this - It makes me feel horrible that I'm proud that I've got my first car on a loan

I'm with you here. I was proud when I was approved for my first car loan, brand new car back when I was 20 Best decision I could have made as it delivered me safely and reliably to my work, NEVER missed a beat.

It's just money and I look at car loans with the attitude of... Why save for four years (or however long it takes you) when you could have the car now by paying the same amount in repayments (or close too) as you would be putting away and saving.

I don't look at cars as a waste of money I see it as a means to - make money by taking you to your employment, freedom to venture places, safe transport for your family.

[Phteven]

It's just money and I look at car loans with the attitude of... Why save for four years (or however long it takes you) when you could have the car now by paying the same amount in repayments (or close too) as you would be putting away and saving.

My maths isn't great but I think that a 10k loan over 4 years at about 12%p.a would cost you about 2.5k in interest. That's not really close to the same amount. It's a lot more.

[Jennifer13]

We lease our cars as we both work for our own businesses. Which makes leasing the best option finance and tax-wise. But a business leasing package is complicated to explain (it's pre-tax dollars for one, so the interest well and truly comes out to less than the (approx 30%) tax I would pay the ATO paying myself the salary to then buy a car, ITMS).

Previously, we have owned our cars outright, I once paid off a personal loan for a car when I was young (better interest than a car finance package).

[helle]

My dad restores vintage cars for a hobby. He has... A few. And they're all worth a pretty penny, but they're all as moody as they come too XD
It is possible for some cars to be an asset and appreciate in value (you just need to do your research and get the right one) however I dont know anyone willing to part with one once they get their hands on one.

[peanutter]

Ugh, and this is why I should never participate in threads like this - It makes me feel horrible that I'm proud that I've got my first car on a loan

Don't feel horrible - it's just a different position

What I hear people saying is that either they find it to be worthwhile and/or financially savvy to get a car on a loan or lease/purchase arrangement, or they don't.

This is why I used the comparison of differing opinions about buying books - I like owning books, so I buy them instead of borrowing them from the library ... I can take as long as I want to read them, I can loan them out, I can highlight parts if I like, I can read them in the bath without freaking out if it gets a little wet, and I can easily pluck them off the bookshelf if I want to re-read bits. I like owning them.

Some would say this is a complete waste of money. I don't think so.

I would not spend $100 on a Grand Final ticket - I don't particularly enjoy football, and it's going to be on the telly ... so I'd rather spent $100 on sausages and munchies and drinks, and have some friends over and watch it together on the telly ... which is what we do basically every year! But some people get $100 of value out of going and watching it in person.

Personally, I would find paying interest on a loan for a car to be a waste of money - we've basically always lived near a train station, my school/uni/work has always been near a train station, I've been catching the train since I was 2 years old, and unaccompanied since 10 years old, I have been roller skating and blading since I was 6, and so until we were responsible for other people's welfare, DH and I had no personal need for a car ... and we're not "into" cars, so we've never wanted to spend much money on them ... something reliable with four wheels and room for a carseat were the only real requirements ...

Many of our friends wanted nicer cars, or wanted one earlier, and so they got a loan. They did the maths, crunched the numbers, and decided they were happy to spend $x to obtain item y.

Their prerogative.

Nothing negative, nothing positive.

Nothing wasteful, nothing shallow, nothing stupid.

It's not even about different values ... it's about what experiences and things we value highly.

Just different views, different people.

JMO.

[Phteven]

My dad restores vintage cars for a hobby. He has... A few. And they're all worth a pretty penny, but they're all as moody as they come too XD

I have car envy whenever I see a gorgeous vintage car (Epacris' Wolsely turns me bright green) but I would never have the dedication to keep one on the road. Unless maybe it was a vintage muscle car....

[krysalyss]

We have generally owned all of our cars outright. We usually just get cheap but reliables. We almost got a honda civic on a whim but regretted the loan which was from a car dealer. Luckily it was still within the cooling off period. When we worked it out the difference in loan terms between the car dealers loan arrangement and a bank were huge. So I guess that is what I would say - if you get a car loan - be careful who your provider is as it can make a huge difference to what you pay in the end.

[beansbeans!]

We've done both, owned outright and had loans. Personally I dont have a problem with either as in the end you are achieving the goal of owning a car. yes you pay interest on your car loan, does it really matter? That loan once paid off goes towards your credit history, and thats definately not a bad thing. Owning outright means you dont have debt, definately not a bad thing either.
Currently we own all of our cars outright plus DH's motorbike. But what erks me the most is not the interest in the loans but the amount of money the govt gets off us everytime we sell and buy new cars. Thats the hardest part for me to pay, and everytime I regret the buy on one level or another once I have to walk into the rta.

[lissy]

Well I feel bad now.....but we have loans for both our cars - 2009 Prado & 2008 Cruiser Wagon. We did own our previous cars outright though & we needed an upgrade before bub came along.

[MissEm]

I'd say that he had a personal loan for this, as opposed to a car loan. We wanted to roll over the loan from one car to the other, and we were told by both the bank and the car yard that it's illegal, because the car is the security. If you sell a car that has money owing on it, then the bank can't claim the car if the loan is defaulted on. We had to pay out one loan, then sell the car, then get the loan for the second car. So we still rolled it over as such - the amount didn't change, we just had to pay one out.

Yes it was a personal loan, is that illegal? Interesting - we were confused as to why he did it that way.

[briggsy's girl]

personal loans are usually unsecured, and attract different interest rates. you can sell anything you buy with a personal loan - but you still have to pay it!

ETA - quite often bank loans/personal loans will allow more money to be loaned out - which can mean a more exxy car purchase
also, with a personal loan, you don't need a deposit. when i purchased my first car on "credit" at 21, i went through the car finance. traded in my first car (purchased outright at 18) and went to both the bank and the car yard to check out how much i could borrow. i got a better deal through the car yard as i had the other car to trade PLUS a 2500 deposit. the bank didn't look at that - just that i had no real credit history so they offered much less...

[snikkers1]

I think everyone is different, circumstances are different and you have to do what your comfortable with and what suits you.

I am very lucky to have a DH who is extremely good at budgeting always has been, we have always owned our cars outright and saved to upgrade them, we have never had a brand new car though but with DH being a car person he has always looked after our cars and made them feel like new.

We currently own a 2004 ford and a 2000 holden ute both in really good condition and low kms and they do us just fine.

[MissEm]

My maths isn't great but I think that a 10k loan over 4 years at about 12%p.a would cost you about 2.5k in interest. That's not really close to the same amount. It's a lot more.

Yes, that's about right, especially when you can be earning the interest yourself by saving.

[Liviam]

We own one and have a loan on the other. We don't have the luxury to pay cash but we pay the loan off as quickly as we can.

[MissEm]

personal loans are usually unsecured, and attract different interest rates. you can sell anything you buy with a personal loan - but you still have to pay it!

Yep, stupid when it comes to something like a car. Thankfully I didn't take after ny parents when it cones to money. Clearly my brother did though. Ah well, his life.

[*Danni*]

We own both of our cars (I am a SAHM too. We chose to buy them outright as we did not want to spend too much money on cars when you can buy cheap and reliable ones 2nd hand as we don't have the money to spend much on them. We have a Daihatsu terios 2001 and Holden Vectra 2001 ( we recently upgraded our Hyundai Excel for bubs arrival. Safety is the most important thing when it comes to cars so if we get the money we will definitely look at upgrading but that is a luxury to us as having a loan on our house (mortgage) is where all our $$$ is as we just had to stop renting as the stability of owning our own family home is the most important thing to have to put interest towards!


Sent from my iPhone more than likely while I should be doing something else