New Car - borrow or use SSIA funds

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podgerodge

Registered User
Messages
1,062
Thinking of trading in my 03 car for a new car.

Current finance is 2 yrs left of a 5 yr fixed loan - 9k outstanding. Car is worth about 9k.

2 SSIA's coming on stream (circa 42k) with no immediate use for funds.

Should I
i) Leave the loan carry on for the last 2 years, trade in the car for 9k and pay 10k cash from the SSIA to get the new car
ii) Refinance the loan to 19k over 5 years and leave the SSIA untouched as it is our "nest egg"
iii) Clear the loan, trade in the car and pay 19k out of the SSIA.

Seems to me I would be throwing money away borrowing at 8% while only earning 3% on the SSIA funds - but feel like I'm spending my SSIA quickly if I don't borrow!
 
Well you're certainly throwing money away buying a brand new car! Why not get an '05 next April when the SSIA's mature - you'd get a really decent car cos apparently second hand cars are going to plummet in price. Of course the flip side is you prob would get a much lower price for your current car
 
The surest way to lose money is to buy a new car, or any car for that matter. Why not buy stocks or property instead? Surely the 03 car will do you for another 5 years at least. After that time, if you invest wisely, the cashflow from your investments will buy you whatever car you want.

I have a 90 D car that I got for nothing, and it still has another 5 years in it at least. All my money goes into appreciating assets.

However, if you really really want (as opposed to need) a brand new car now, pay with cash. Why pay someone else 8 or 9% to lose money when you can do it for 0%?

t
 
I really just hate my current car! I agree with the sentiments but a new car that I like, and it being replaced for free next year, and then holding on to it for a few years appeals! Spending the SSIA feels mad compared to borrowing!
 
podgerodge said:
was thinking of the Nissan Almera deal - buy an 06 and get an 07 next year free.!
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Read the small print carefully if you decide to go through with this. I believe that this deal requires you to pay full retail for the car.
 
podgerodge said:
I really just hate my current car! I agree with the sentiments but a new car that I like, and it being replaced for free next year, and then holding on to it for a few years appeals! Spending the SSIA feels mad compared to borrowing!
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I still advise you use the cash, if you really want the car. You are saving more over the medium term by doing this, since the car depreciates over time. (unless of course you plan on using it as a taxi or renting it out. Then it might make sense to borrow money to buy it.
 
miser said:
Read the small print carefully if you decide to go through with this. I believe that this deal requires you to pay full retail for the car.
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Correct. It's great marketing but of course the old adage applies "if it's too good to be true..."

Wholey apart from the fact that it's not a great car and you could do a great deal better for your money don't be swayed by this deal just for the sake of getting another new car in 07.

Let me play devils advocate for a minute. You're justifying the move because you 'hate your old car'. Fair enough then, sell it privately where you'll make considerably more than you will by trading in and then put that cash towards a similar aged car you really like.

The idea doesn't appeal? Then forget about telling yourself it's the car and admit it's the plate you're really interested in. Never understood the attraction of spending thousands on what amounts to a number plate myself but it's your money.

(One other point of interest, "two SSIAs coming on stream with no immediate use for funds" doesn't mean you have to find something to spend it on! )
 
Eurofan said:
Wholey apart from the fact that it's not a great car and you could do a great deal better for your money don't be swayed by this deal just for the sake of getting another new car in 07.
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yeah, was sorta swayed by this marketing deal before I even checked the car out! I don't want to go to a 1.6 litre, I have a 1.4 litre and this sounded like a compromise at 1.5 litre.

whatever, it seems everyone agrees that borrowing makes no sense if the funds are earning less on deposit.
 
Isn't the mileage limited under the Nissan '06 for 07' deal? i.e. if you do over X miles/kms, you will not be able to exchange the '06 car for an '07 car?

Simple advice-unless you are getting better than 7% on an investment, why not use the SSIA proceeds? If you are a cash customer, you will surely be able to avail of a discount (unless you opt for the Nissan deal).

I'm not going to bother mentioning the arguments for 'buying new vs second hand', that's for another thread.
 
podgerodge said:
I don't want to go to a 1.6 litre, I have a 1.4 litre and this sounded like a compromise at 1.5 litre.
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Why? The difference in road tax between a 1.4 and a 1.6 is 99 euro per year (do a search for "motor tax" on oasis.gov.ie). Hardly a huge amount given the cost of the car.

Insurance shouldn't increase by any more than 1-200 either, unless you're male and under 25

Fuel consumption is not necessarily directly linked to the size of the engine either. Have a good look at the manufacturer's fuel stats, then do some research on the internet before you commit to a purchase.

And as the previous posters said, just because your SSIA is maturing doesnt mean you have to spend it
 
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