How do people finance 70,000 odd $$ to purchase a new car - Page 2

Yellow_Festiva · 27-09-2012, 07:08 AM

I agree with all the above posts....

Just 1 thing. Your home loan savings account, is that the one where the government co-contributes or gives you a high interest rate?

If so, the money can only be used to buy a property. Or to go into your super if you don't. You won't ever get it as cash after the minimum (4yr?) term.

Keep the xr8, pay down your debts and breathe easy knowing your not a slave to the banks.

Bearman · 27-09-2012, 07:30 AM

Mate, you sound like me 25 odd years ago.

I ended up on a treadmill of constantly taking out loans to get a "cooler" car every couple of years. As a result I was in my mid 30's before I bought my first house.

It was 1997. At that time I had 3 cars. I sold 1 which went to the house deposit, sold the 2nd one for house repairs and kept the 3rd as my daily.

With home equity loans I still indulged in cars at times when I shouldn't have and I've been playing catch up ever since. I still have a mortgage which should have been paid off by now.

If I could go back and give the 25yo Bearman a talking to I'd be saying pay out your loans and put up with driving a dirtbox until the wheels fall off. I'd also say that a "cool" car will make no difference in pulling chicks!!

I'm nearly 50 now.

To the OP, my first course of action would be to sell the XR8, buy a cheap runabout and get rid of your loan. Then start saving and go on from there.

Hard yards now will pay off big time down the track. Trust me, the time will go very quickly!!!

Agent86 · 27-09-2012, 07:43 AM

65k loan = right at $1500/mo in repayments.

The only times anyone should borrow for a car are #1 the reliability is required to retain ypur job ( for eg, long distances to work )and #2 the vehicle is a part of your work and is part of your income generation and thus can be used in your taxes and such.

Personally, i understand your situation, having been in a similar one myself ( overstated child support and an agressive money hungry ex sucks! )

Resist the urge because in the long run, you need to get to 0 loans and some savings in the kitty, be it for a car or more importantly, a home for when ypu eventually desire one.

At that level of income, i would be looking into a better workplace myself. No reason why ypur not up around 850-900 takehome a week minimum.

Might be time for you to start to establIsh ypur own small buisness on the side to help you achieve your goals.

JG65TE · 27-09-2012, 07:47 AM

70k is a little less than what I payed 4 my first house. I am pretty free with my money, if I want something I usually buy it but I'm older now n can do it. I see a young dude in a big $ car n say to myself, he done a whoops. Unless his parents are loaded of course. In which case his parents done the whoops. You probably won't believe me but any car will get u to work. Sure a 355 will get u there much cooler but not when the thing eats all ur spare cash in insurance,big wheels and rego. If ya old one is really knackered , sell it n buy a cheapy. Get some years and some money behind u and then get the cool stuff. Bear is nearly 50 ?. I feel young again. Pace urself thru life. It's not a race....

JC · 27-09-2012, 07:55 AM

Quote:

Originally Posted by XARATE

Ok this is going to seem like a stupid question, but how do some of you guys go about getting finance for a new car?

Im looking at getting a second hand FG 335 GTP in white with a six spees manual, but im looking at the financial aspect and i cant understand how i can get such a loan with any real assests. I hoping someone can advise me on if my financial position looks good from a banks view. I dont want to go for a loan if im going to get knocked back.

I currently have a 6speed manual 2005 ba xr8 which i could sell privately for around $18,000 and my really my only other assests of any value is approx $10,000 in tool/toolbox.
I also earn $630 a week after tax (auto elec same employer for 5 years) with $200 a week going towards a personal loan of $27000 over the next 5 years (car and medical bill)
Ive got no rent to pay as im at home looking after my sick father and i have a perfect credit rating (one credit card thats emergencys only and two previous loans payeed of well before that were due)

My xr8 is getting a bit on and want something with bigger balls, more stopping power and more modern, i feel i can afford to buy a FG but what do you guys think? Will the bank be in my favour? Im told by people i work with that i may not earn enough?

That weekly take home puts you on $37k per year. I assume 3 or 4 of the 5 years you have worked at your current employer were as an apprentice, so no doubt $37k sounds likes heaps compared to the patience an apprentice gets. But consider that the workshop is charging you out at $80 per hour, or roughly $500 per day. Now they have overheads etc to cover, but basically you are getting the very short end of the stick. I have no idea how much profit they are making, but if the business does alright, then you are being paid well below par, IMO. You should really be earning at least an additional $10k gross - just look at seek etc for jobs, and the going rate for auto elecs was around $900 per week in 2006 (http://www.myfuture.edu.au/The%20Fac...111A#Earnings).

My advice: The internet is bigger than just AFF, use it to your advantage to either do some research for a pay rise, or to find another job.

usernametaken · 27-09-2012, 08:05 AM

yep, sell the xr8 and buy a runabout

use the proceeds to pay down the loan

focus 100% on paying off remainder of loan.

Once paid off - save 50% of car deposit. Then realise just how long and hard it was to save 50% and I guarentee you won't be blowing it on a car ;)

Good on you for seeking opinions though - a lot of people would have just gone ahead and bought the car.

OLDFORDNUT · 27-09-2012, 08:19 AM

and dont do the fools trick of buying a house and adding cost of car into home loan like many do, often resulting in house repossession down the track,people seem to think adding car onto home loan is great idea as its only around 7% not realising its for 30 years and car needs replacing after only 5 years,thus borrowing again,ive seen 3 families that i know lose there homes this way as both wife and husband buy new or near new toys on there home loan

csv8 · 27-09-2012, 08:29 AM

Powerball tonight, $30m great way to finance my Aston Martin !!

leighm · 27-09-2012, 08:30 AM

It is easy for everyone to say sell the car, but perhaps like a lot of us here the car means a lot to him and he likes the fact he has it.

I would dare say your personal loan interest is above 10%, but your savings account you refer to is well below 10%. Basically if you put any money into that loan and not in the personal loan instead, you are automatically losing money due to the difference in interest.

If I were you, I would get rid of that $27000 loan immediately. Take all the money out of your home savings account and put it straight on your personal loan. If you can't get to it right now, bump it up to the figure where you can access it by putting all your money into it, then withdraw the whole lot. Leave your self a little on the side for emergencies though. Sacrifice all your pay and get rid of that loan. Then start saving for the house.

There is no point in putting money into a low interest account, while at the same time paying the minimal on a high ineterest loan. The problem you might face is if there are penalties for paying out your loan sooner. You need to get that information.

Forget about the $70000 car. You need to earn more in a year than what the car is worth to be able to even start to afford it on a 5 year loan term.

$650 per week net income is a low wage. It will take a little under two years to payout your personal loan based on your income if you dedicate half your salary to it. Obviously less time if you throw all your savings into it as well.

pursuit2359 · 27-09-2012, 08:50 AM

I've always been averse to debt (don't like owing anyone anything), so I'd work on paying off the existing loans.

I used to work for a big four bank and that one would do unsecured personal loans for up to $50,000. They called them "quick and dirty" loans: quick for the bank to lend, dirty when it comes due.

Vesper Martini · 27-09-2012, 08:58 AM

Keep the 05 XR8 is a good car, and fast enough too.
Most people cannot afford $70K for a car (that includes most of the people driving them)

TEKILA · 27-09-2012, 09:00 AM

Loans for a depreciating asset are bad unless you are on car allowance and use the car for work where you can claim the depreciation like I do.

I would keep saving your money because one day when you own a home you will look back and appreciate the hard work you put not saving. And I would try and pay off the loan you have at the moment as well as quick as you can.

Mr Hardware · 27-09-2012, 09:27 AM

Quote:

Originally Posted by OP

I also earn $630 a week after tax

fix this as fast as you can.

TIC-302 · 27-09-2012, 09:43 AM

Quote:

Originally Posted by Mr Hardware

fix this as fast as you can.

i agree, i was on $500 take home as an auto elec in 1999 !

GT 160 · 27-09-2012, 10:06 AM

First thing i'd be doing is either asking for a pay rise or finding another employer as your being seriously underpaid.

Franco Cozzo · 27-09-2012, 10:08 AM

Never get loans for cars, it only ever ends in tears. I'm 21, been working casually since I was 15, had my first new car at 17, my WS Fiesta, picked up a full time job when I finished year 12, still working the casual one on weekends and I got my TDCI Focus last year.

None of that was with loans, that was saving up birthday money and working here and there.

I'm supposed to be saving for a house but I'm looking at one last hurrah when I'm off my Ps before I get serious.

Or I'm going to be 50 living with my elderly parents with 150 cars, either one.

The Yeti · 27-09-2012, 10:26 AM

As said before keep what you have pay of the existing loan,

Borrowing more for a newer car is only going to lead to trouble down the track,

Your not on bad money but your tastes in cars seem to be that of some one earning 2-3 times more.

Cars are great and I love them but they depreciate so big finance exposure on a car is no way to live, a reliable car and a house is a great place to start then perhaps revisit the idea.

An older car is nothing to be ashamed of

BENT_8 · 27-09-2012, 10:30 AM

Heres what i'd do.

As said above, you'll be paying $1500+pm to service a loan for the 335GT, never mind insurance which would be a rediculous amount.
Right now your paying $800pm or there abouts.

If you can double your repayments on the XR8 you will achieve 2 things.
1, you will smash the current loan a lot sooner, saving interest.
2, you will know after 12 months if you can really afford a GT as you would have been paying roughly the same amount on your current loan.

After 12 months you will have payed off an additional $9k off your current debt

If after 12 months you find you can handle the 400pw payment, continue to keep it up until the XR8 is payed for(another 12 months), then trade it on a good second hand GT you know you can handle.

If you find after 12 months that paying 400pw has made life boring, keep the XR8, spend some money on it to liven it up a bit and take yourself on a driving holiday somewhere to reignite your love of Ford's V8.

XARATE · 27-09-2012, 10:32 AM

You guys are giving some great advise and im taking it all on board. I answer a few things that stand out.
Firstly my employer isnt in the position to offer a pay rise and he is meeting the award wage. We have alot of overheads in a small town where business is slow in winter, asking for a pay rise and getting one would put too much strain on the business and put my job at risk.

Quote:

Originally Posted by Bevsta007

Keep the 05 XR8 is a good car, and fast enough too.
Most people cannot afford $70K for a car (that includes most of the people driving them)

Thats the point of the thread, i see alpt of people with big expensive cars and i stuffle to see how some of them actually got the loan.

Quote:

Originally Posted by tregs

Keep your car and save your money mate when your debut free keep saving and buy a house first cars are a waste of money .

At the monent thats the plan im going to stick with

Quote:

Originally Posted by Phildo

Well, seeing as everyone else is lining up to shoot your dreams down I'll get in line and have a go as well.

This bit got my attention. Your living costs are very low now, but you're looking at a five year deal with the finance. What happens if/when your living costs increase? Which they will...

You meet a girl... want to shack up with her...

You and your father have some big argument and you both need breathing space for a few months...

Your father passes away and you have to find other accommodation as the house gets sold...

Your father gets worse, goes into hospital long term and the house needs to be rented out at full market value to pay for medical expenses.

Sorry for the negative suggestions. But, not considering possible negative outcomes is what gets people into a heap of grief when there's finance involved.

If you really need a stepping stone then consider a BF XR6 Turbo.

Alternatively, save up cash and buy things secondhand as they come up and do your car up. Wheels, brakes, interior stuff, engine stuff, etc, always come up for sale on these forums at good prices. You could throw five grand at it that you'll never get back, but that's still less than the 20 grand that you'll throw away in interest and depreciation costs on a financed car.

Meanwhile, one Powerball...

Already met the girl (3 years now) she got a house already (result of her parents investment and we also keep our finances seperate)
With dad and the house if worse come to worse i actually inherit the house which will be debt free

Quote:

Originally Posted by AndyXR6T

Mate hit your boss for a pay rise, buy a house. You will be looking at least $500 a week for a house around $350k (which won't get you much of a house anymore lol). In 5 years time if your doing good financially then look at buying a newer car

Where i live you can get a great 3/4 bedroom house for less than $200k

Quote:

Originally Posted by Yellow_Festiva

I agree with all the above posts....

Just 1 thing. Your home loan savings account, is that the one where the government co-contributes or gives you a high interest rate?

If so, the money can only be used to buy a property. Or to go into your super if you don't. You won't ever get it as cash after the minimum (4yr?) term.

Keep the xr8, pay down your debts and breathe easy knowing your not a slave to the banks.

Yep thats the one, had it almost 12 months now.

XARATE · 27-09-2012, 10:35 AM

Sorry for all the spelling errors im on a stupid iphone with the tiny tiny keypad

TheSneakiness · 27-09-2012, 10:40 AM

Quote:

Originally Posted by Mr Hardware

fix this as fast as you can.

Agreed, I sit in front of a PC for 7.5 hours a day, work probably 3 of those and take home about $800 a week.

I currently pay $1260 a month for the Paj in my sig, I can tell you its not easy at all, especially when you also factor in kids too.

GTP owner · 27-09-2012, 11:01 AM

If you are wondering how many of us get a loan for more expensive cars the answer lies in two things. Many of us run our own businesses, and therefore claim the vehicle as a deductible asset. The interest and depreciation is a tax reduction measure. I would prefer to pay into a car than pay more tax to our stinking government. I run all of my cars through my small business, using a logbook method to get maximum deductibility.

The next thing is that we have assets which can be used against the loan - the business assets, own home etc. That makes the banks want to talk to us. If we did not have that collaleral, they would tell us to go somewhere else.

The final thing is that we did the hard yards and went without for many years before we could afford something more expensive. I drove a rusted and dented VH 6 cylinder for years until I bought my own business at 24. Only once I was more financially secure did I spend some coin on a better car. But it was 5 years of making good money before I bought my GTP.

The advice you are getting here is spot on. Don't take out a personal loan for a depreciating asset, and pay down your current loan quicker. Enjoy driving such a nice car that you already have.

As for upgrading and thinking you will be satisfied....sorry it usually does not cure the addiction. I can't really afford anything expensive at the moment due to finishing off uni for a second time, but I would love a new r-spec. But if I had that, then I would love to upgrade to an audi RS4. And if I could afford that I would be wishing I could have a bit more to afford a Bentley Continental GT. It never ends!

Smoke Pursuit · 27-09-2012, 11:01 AM

Quote:

Originally Posted by Bevsta007

Keep the 05 XR8 is a good car, and fast enough too.
Most people cannot afford $70K for a car (that includes most of the people driving them)

Whats your idea with that statement?

If you cant afford it the bank typically wont give you the money for it.

I agree with what everyone has said, you definitely cannot afford an upgrade. If anything you should be downgrading to a cheaper car and paying off the loan you currently have.

Plenty of people finance cars, there's no issue doing so providing you can afford to. Id rather sink my cash into property and investments then silly cars. Interest is cheap, especially when you use them for work. Many of the people who dont finance their cars (or suggest so) use their line of credit on the home loan. Yes they might own the car but they just added another 5 - 6 years to pay their home loan off.

Vesper Martini · 27-09-2012, 11:07 AM

Quote:

Originally Posted by XARATE

Thats the point of the thread, i see alpt of people with big expensive cars and i stuffle to see how some of them actually got the loan.

Thats pretty much what leaded the GFC in 2008
since then then banks have tightened up on thier rules.
2009 was a good time to buy a boat if you were in the market for one, so many people had to sell the thing they didnt really need in order to get by...

Smoke Pursuit · 27-09-2012, 11:10 AM

Quote:

Originally Posted by Bevsta007

Thats pretty much what leaded the GFC in 2008
since then then banks have tightened up on thier rules.
2009 was a good time to buy a boat if you were in the market for one, so many people had to sell the thing they didnt really need in order to get by...

The banks haven't tightened up that much on personal loans / commercial loans. Trust me.

What they have stopped doing is lending 100% or 105% (some) against properties, this is where all the trouble started especially in America. (AKA the subprime mortgage crisis).

XARATE · 27-09-2012, 11:22 AM

Quote:

Originally Posted by OLDFORDNUT

and dont do the fools trick of buying a house and adding cost of car into home loan like many do, often resulting in house repossession down the track,people seem to think adding car onto home loan is great idea as its only around 7% not realising its for 30 years and car needs replacing after only 5 years,thus borrowing again,ive seen 3 families that i know lose there homes this way as both wife and husband buy new or near new toys on there home loan

Im glad you bought that up as it was an option that i have thought about. The way i looked at it was that combining the two would lead to lower weekly payments rather than two larger seperate repayments. But on the flip side as you bought up the interest over 30years would be a killer.

I thought about all this last year (hence the home loan savings account) with the aim of buying a large rural block of land (around 70k) then after paying it off buying a prevuilt home to put on the block
But i like my cars abd the 335 is a nice car that pulls all the heart strings, this replys im getting is want i need. Its a wake up call and has gotten my head out of la la land

XARATE · 27-09-2012, 11:24 AM

Quote:

Originally Posted by GTP owner

If you are wondering how many of us get a loan for more expensive cars the answer lies in two things. Many of us run our own businesses, and therefore claim the vehicle as a deductible asset. The interest and depreciation is a tax reduction measure. I would prefer to pay into a car than pay more tax to our stinking government. I run all of my cars through my small business, using a logbook method to get maximum deductibility.

The next thing is that we have assets which can be used against the loan - the business assets, own home etc. That makes the banks want to talk to us. If we did not have that collaleral, they would tell us to go somewhere else.

The final thing is that we did the hard yards and went without for many years before we could afford something more expensive. I drove a rusted and dented VH 6 cylinder for years until I bought my own business at 24. Only once I was more financially secure did I spend some coin on a better car. But it was 5 years of making good money before I bought my GTP.

The advice you are getting here is spot on. Don't take out a personal loan for a depreciating asset, and pay down your current loan quicker. Enjoy driving such a nice car that you already have.

As for upgrading and thinking you will be satisfied....sorry it usually does not cure the addiction. I can't really afford anything expensive at the moment due to finishing off uni for a second time, but I would love a new r-spec. But if I had that, then I would love to upgrade to an audi RS4. And if I could afford that I would be wishing I could have a bit more to afford a Bentley Continental GT. It never ends!

Wow thanks for the detailed explination. Its great to now know how its done

TheSneakiness · 27-09-2012, 11:34 AM

Quote:

Originally Posted by DASH GT

The banks haven't tightened up that much on personal loans / commercial loans. Trust me.

What they have stopped doing is lending 100% or 105% (some) against properties, this is where all the trouble started especially in America. (AKA the subprime mortgage crisis).

Trying to consolidate debt, **** yes they have tightened up. I cannot consolidate any debt I have outstanding.

Agent86 · 27-09-2012, 11:48 AM

Quote:

Originally Posted by XARATE

Im glad you bought that up as it was an option that i have thought about. The way i looked at it was that combining the two would lead to lower weekly payments rather than two larger seperate repayments. But on the flip side as you bought up the interest over 30years would be a killer.

I thought about all this last year (hence the home loan savings account) with the aim of buying a large rural block of land (around 70k) then after paying it off buying a prevuilt home to put on the block
But i like my cars abd the 335 is a nice car that pulls all the heart strings, this replys im getting is want i need. Its a wake up call and has gotten my head out of la la land

The only way to make using your low interes home loan work in this instance is to pay it at the jormal rate, whilst payin in what the 5 year loan amount would be on the additional expendature.

Fact is, no matter how well intentioned, almost everyone does not do this, thus that 70k extra for eg, is charged at 7% for the full home loan term. Do the math and the vehicle becomes very damn expensive quick.

FPV+fteT3 · 27-09-2012, 11:49 AM

For the most part good advice has been given here. My hobby/fun cars are run through my business as stated in previous posts its either have a nice car or pay more tax. I lease them and claim all the costs, technically I dont own any of them, my company does. I tell people If I had to pay for FPV's and alike myself I could not justify the cost and would not own one. For me and I am sure many others its as simple as that.
Look at the number of 15-30k $$ value new cars on the road, there are a lot of people who set their budget around that figure for personal transport, compare that to how many 70k+ cars you see in the traffic every day tells you how most people think unless you live at Vaucluse.
An XR8 is a very nice car to own as personal transport and there are a lot of people wishing they could have a car like that one day.