# Just sold my car now what to do with loan, etc??



## marty004 (1 Nov 2012)

Hi Folks,

First of all a breakdown of my current situation.

Car was just sold for €13,000

In order to clear my AIB Car Loan would be €11,450 (this was a 5 year fixed loan with only 2 years remaining - non Hire Purchase)

I then hope to buy another car in Feb/March next year and will require a new loan for €20k (I know what I want buy but have a lend of a car until then).

Loan interest rates have gone up as we all know and have also been informed (someone correct if I'm wrong!) that most car loans are now based on Hire Purchase Agreements (which I don't want tied into) so I will not own the car until full payment is made.

My current repayment on the €11,450 is €402/month (this will be paid in full by Jan 2015)

So what's the best option if I need a 20k car loan in a few months time (without having a Hire Purchase)?

A. Do I keep the 13k I made from the car sale and continue paying back the remaining car loan for the next two years and come Feb/March try get a separate personal/car loan from a different institution for the extra 7k?

B. Do I clear the AIB loan which will leave me with €1550(€13k - €11,450) cash and then look to get a new €18,450 5 year loan in Feb/March with the higher interest rates??

C. Open To Suggestions!!

Hope that makes sense.

Marty


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## pc7 (1 Nov 2012)

Everyone is different but without knowing your incomings/outgoings it is hard to give advice. But I'd personally clear the loan now.  Put the 1550 into savings, use the amount I was repaying (approx €450ish a month is that correct) and save that until March that would give you 2250 + 1550 = 3800 and use that to buy a 2nd hand car outright and continue saving the €450 a month.  Without knowing what committments you have, job security etc its hard to give proper advice.  I would be reluctant to borrow 20,000 for a car but that is just me personally.


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## marty004 (1 Nov 2012)

Thanks pc7,

Yes this is what I was thinking of doing but I don't want to go down the Hire Purchase route and if I have €13k sitting in my account now and only two years to clear my o/s balance with AIB then this sounds attractive also.

All i need to do come March is get a personal loan for €7k rather than paying another load of interest on the €20k over the 5 years.


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## dereko1969 (1 Nov 2012)

Do you really need a 20k car? Or do you just want it. 

You should look at the interest rates being charged and do the figures based on what you've suggested in your last post - getting a separate 7k loan in March and see which makes sense. 

If it were me I'd be looking at buying a cheap 6k car and running that until it bites the dust, and saving at the same time to build up enough to purchase without a loan the next time. But you'd laugh at the car I drive.


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## marty004 (1 Nov 2012)

I just want it   My car is the only thing in life I ever treat myself to so yes €20k is needed to get what I would like and at 412/month I can afford to pay it if required but just wondering could I save myself some dosh any other way with what I currently have left from my last car.


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## Slim (2 Nov 2012)

The best option is the one that costs you least, in terms of interest to be repaid. If your existing terms are more favourable than what you could expect to get next March, then keep the money on savings for a few months and then borriow the extra €7k. Some car companies are offering keen credit rates but if you are not buying new, that's no use.


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## newirishman (2 Nov 2012)

pc7 said:


> Everyone is different but without knowing your incomings/outgoings it is hard to give advice. But I'd personally clear the loan now.  Put the 1550 into savings, use the amount I was repaying (approx €450ish a month is that correct) and save that until March that would give you 2250 + 1550 = 3800 and use that to buy a 2nd hand car outright and continue saving the €450 a month.  Without knowing what committments you have, job security etc its hard to give proper advice.  I would be reluctant to borrow 20,000 for a car but that is just me personally.



Generally would agree, however, AFAIK most of the car loans (with the fixed interest) charge all the interest upfront, so the first thing you pay off is all the interest for the lifetime of the loan.
So paying the loan off early means you gave the bank money for 2 years worth of interest without getting any return for it. Doesn't sound like a good idea to me!


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## eirefinq (4 Nov 2012)

out of interest what kinda car have u sold and what kinda car have u your eye on for next March?

20k is alot of dosh, have u a mortgage? 

Why not buy a bike?! you can get it for half price with tax relief!


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## twofor1 (4 Nov 2012)

eirefinq said:


> Why not buy a bike?


 
I agree.

But can’t see marty004 giving this suggestion much consideration 

See post 5 above.


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## marathonic (7 Nov 2012)

marty004 said:


> I just want it  My car is the only thing in life I ever treat myself to so yes €20k is needed to get what I would like and at 412/month I can afford to pay it if required but just wondering could I save myself some dosh any other way with what I currently have left from my last car.


 
If your car is the only thing in life you ever treat yourself to, then obviously, you will be able to save the VAST majority of your salary towards a car and avoid a loan altogether (considering you don't need to spend money on any other 'treats')


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## Bronte (8 Nov 2012)

I concur with Pc7's excellent advice. 

As for 20K on a car, boy and toys.  Have fun.


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## Laramie (9 Nov 2012)

Bronte said:


> As for 20K on a car, boy and toys. Have fun.


 
Different things for different folks at different times in their lives. The last car I bought in 2005 has low mileage. I intend keeping it until one of us falls apart. Even hope to make it to classic status. I am sorry I never stored my 2CV Citroen away or Honda Civic CRX.


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## SarahMc (9 Nov 2012)

Sorry Marty, but I really think you can't afford a 20k car, if your budget is so tight that even though you don't spend money on non necessities you have no savings, you just don't have the comfort space necessary for a loan of that amount.


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## marty004 (15 Nov 2012)

Thanks for the advice folks.
I'm going to go and get the bike instead after all that! 

@SarahMc just because I can't afford 20k up front it doesn't mean I can't however afford €96 repayments per week(based on an APR being of 9.4% with some institutions) and still have enough to pay for mortgages, creches, essentials and future savings.

Some people spend that kind of money on a night out every weekend.  They like there social life and I like my cars.  I have kids so no social life these days!!  

In saying all that your probably right though but what the hell! I'll try be sensible


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## marty004 (15 Nov 2012)

eirefinq said:


> out of interest what kinda car have u sold and what kinda car have u your eye on for next March?
> 
> 20k is alot of dosh, have u a mortgage?
> 
> Why not buy a bike?! you can get it for half price with tax relief!



Hi eirefinq,
I had a Opel Insignia Turbo SRi 4x4.
Haven't decided what to get yet but with kiddies (hence bike is not an option) will have to finally be sensible (kinda  )in my old age!
Will see what this budget hits us all with first!
Cheers.


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## Palerider (16 Nov 2012)

Slightly off topic Marty004 but some people will never get that you are clearly a car nut, take if from another nut, it is akin to a disease but you are compelled to have a nice car under your ***, to hell with the begrudgers and the depreciation, you go get that motor no matter how you do so financially ....and then polish it til your elbow drops off ...it's just your thing and we all need a thing eh ..... enjoy !


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## marty004 (19 Nov 2012)

I like your thinking Palerider but I have *slightly* come to my senses and just bought a car at the weekend.  The New Dacia Duster 4x4.  It's its first time in the UK/Irish market having been a massive success across Europe the last few years.  Its extremely competitive pricing, highly economical (57mpg) and a huge boot for all the Kiddies gear!!   The Sports car will have to wait another few years! 

Cheers everyone!


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## Palerider (7 Dec 2012)

Very sensible, James May was impressed when he did a review on Top Gear, would you come back in a few months and let us know your views on living with ' The Duster '..?


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## jackswift (1 Jan 2014)

Sorry for digging up an old thread but I am wondering who would buy a car with loan payments outstanding? Would the title of the car be transferred if money were still owed on it?


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## Guns N Roses (1 Jan 2014)

jackswift said:


> Sorry for digging up an old thread but I am wondering who would buy a car with loan payments outstanding? Would the title of the car be transferred if money were still owed on it?



It depends on the type of finance used to secure the original loan. Hire purchase type agreements are secured on the car while personal loans or traditional type of car loans are usually unsecured and therefore are not attached to the car.

I myself have always used personal loans to buy cars as I prefer the flexibility of owning the car outright from day 1.


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