Best way to finance new car.

[Fionn]

I've 20k balance on a 37k personal loan, fixed IR. I've also 20k in the SSIA and a CC balance of 3k. The CC is cleared monthly by DD from a current account, balance 7k. The CC balance is exceptional this month, usually only about 1k.

Shortly I will be changing my car. The deal is my current car + 14k, approx 40k all in.

The repayments on the personal loan are 850pm over 4 years.

What's the best way of financing the new car.

Use the SSIA to clear the existing loan and then borrow the 14k? Just draw down 14k and keep the existing loan.

With the cessation of the SSIA and clearing the existing loan i would be 1100pm better off.

EDIT: Is this a bit of a silly question?

 

[ailbhe]

I would work out the cheapest per month and most expensive per month.

The cheapest will prob cost you more in the long run so if you can afford the more expensive option per month and it costs less overall then do it.

 

[RainyDay]

In general, you should use your investments to pay for such purchases and borrow the minimum amount, unless you are confident that your investments will earn a better return than the interest rate you are paying on your loans.