Personal Finance for car
- Thread starter bawley
- Start date
I don't know about these days. But in the early 90s I was initially refused for a loan for a block of land because I did not have a recent credit history (I had been in England for a few years). And then I was refused a loan to build the house because I did not have savings- all of my savings had gone towards reducing the loan on the land, and were not sitting in the bank.
And I'm not sure about "needs a new car".
I'd go for a not very old car with 40K on the clock- at the higher interest rate she'd be looking at, it could cost lest than your low rate loan on a new car (assuming you do mean "new")
And I'm not sure about "needs a new car".
I'd go for a not very old car with 40K on the clock- at the higher interest rate she'd be looking at, it could cost lest than your low rate loan on a new car (assuming you do mean "new")
geoffw said:
Yes new, brand spankers. She currently drives her third car. First two written off, oooh ouch
Not her fault. She has owned older cars and had substantial repairs bills to bring them up to scratch. Is sick of this and is in love with the idea of 100,000km warranty. Is selling her current car to brother (so no trade in)and will need to borrow about $15,000.
She has almost that amount in Navra Share Fund, but doesn't want to touch that money - earmarked for first property purchase.
bawley said:Yes new, brand spankers. She currently drives her third car. First two written off, oooh ouch
She has owned older cars and had substantial repairs bills to bring them up to scratch. Is sick of this and is in love with the idea of 100,000km warranty. Is selling her current car to brother (so no trade in)and will need to borrow about $15,000.
She has almost that amount in Navra Share Fund, but doesn't want to touch that money - earmarked for first property purchase.
Cars tend to lose up to 25% of their value the minute they're driven from the dealer's garage.
Admittedly, you won't get a 100,000 km warranty, but looking at a car 5 or so years old is a worthwhile exercise.
For example, 1999 Mazda 323 Protegés for less than $15,000, with low kilometres. Just make sure that when making an offer, you're able to write in a "subject to finance and subject to my mechanic's approval" clause. That way the chances of buying a lemon are dramatically reduced.
I did this with my car, (although mine was $5000).
Hope that helps.
Hiya
Positive credit history isnt of much use in Australia.
Your file is either
A) Non existent
B) Neutral, it contains the $ values of the applications and the lender but, but not if the loan was taken up or not
C) Negative, defaults on loans, telco accts etc
ta
rolf
Positive credit history isnt of much use in Australia.
Your file is either
A) Non existent
B) Neutral, it contains the $ values of the applications and the lender but, but not if the loan was taken up or not
C) Negative, defaults on loans, telco accts etc
ta
rolf
bawley,
Let her buy that new car on finance.
In three years she'll understand that it was the worst purchase she could make when trying to start investing.
Can't she wait until AFTER she's bought property?
At least get her to play Cashflow & ensure she gets the new car doodad straight away.
Cheers,
Aceyducey
Let her buy that new car on finance.
In three years she'll understand that it was the worst purchase she could make when trying to start investing.
Can't she wait until AFTER she's bought property?
At least get her to play Cashflow & ensure she gets the new car doodad straight away.
Cheers,
Aceyducey
A car 12 or 18 mths old may still have the warranty but cost less.
I would let her get the loan as it is good to get the experience in dealing with lending institutions. It gave me confidence - when it came to a home loan I wasn't so scared.
I took a loan recently for first property. Not one loan establishment was IN THE SLIGHTEST interested whether or not I had previously had a loan (nor that I had fully paid out my 5-yr-loan in under 3 yrs). I was surprised by this, they were far more interested in my earnings, marital status and credit cards.
Mortgage brokers will be able to chime in about whether or not the industry takes a credit rating into account these days.
I still think powering through a loan is good training ground. You get to see the reality of how the extra payments help out!
All the best for her decision.
I would let her get the loan as it is good to get the experience in dealing with lending institutions. It gave me confidence - when it came to a home loan I wasn't so scared.
I took a loan recently for first property. Not one loan establishment was IN THE SLIGHTEST interested whether or not I had previously had a loan (nor that I had fully paid out my 5-yr-loan in under 3 yrs). I was surprised by this, they were far more interested in my earnings, marital status and credit cards.
Mortgage brokers will be able to chime in about whether or not the industry takes a credit rating into account these days.
I still think powering through a loan is good training ground. You get to see the reality of how the extra payments help out!
All the best for her decision.
Sim
Administrator
I would suggest that you tell her to be careful with "finance companies" (eg AGC/GE etc - as often offered by the car dealer) and go to a bank/building society/credit union for her finance - the bigger the better. Why ? Because I have seen several examples of cars purchased on "finance" that have then resulted in huge insurance bills under the argument that people borrowing through finance companies are higher risk than those who can borrow through a bank.
I'm not sure if this is still relevant - and competition in the insurance space may have sorted this out, but it's something to be careful of anyway.
Try this to compare rates: http://moneymanager.smh.com.au/tools/compare/carloans.html
I'm not sure if this is still relevant - and competition in the insurance space may have sorted this out, but it's something to be careful of anyway.
Try this to compare rates: http://moneymanager.smh.com.au/tools/compare/carloans.html
If she were to borrow the money off you, couldn't she still put that down under loan history, maybe with a stat dec from you saying that she has successfully paid back $x over x years at an interest rate of 6.5%. Wish my parents had offered me the same deal when I got the same dumb idea in my head.
there's no way I would buy a 6 year old mazda 323 for $15k when you can buy a brand new mazda 3 with warranty for $21k.
people talk about the heavy depcn rate on aussie cars, what they don't factor in is the huge upfront discounts you get. the residuals are calculated on RRP but who pays that?! the only reason mercedes residuals are so good is that they don't discoutn upfront
people talk about the heavy depcn rate on aussie cars, what they don't factor in is the huge upfront discounts you get. the residuals are calculated on RRP but who pays that?! the only reason mercedes residuals are so good is that they don't discoutn upfront
Ausprop said:
I agree. Buy the new car.
WHY
She has saved almost $15k so does not need a lesson in saving or doodads. She knows how to invest. Why not a reward? She has saved hard.
BENEFITS OF NEW CAR
Safety. New car will have much more safety features than an older car. As a young driver this may be priceless in an accident.
Warranty, warranty, warranty. Yes servicing costs but you can use Lube Mobile and such. Whenever you buy a second hand car you have no idea of the history.
Whilst you lose $$$ on new cars provided you are going to hold for 4 years or more the loss is spread out and gets less each year. Old cars depreciation too unless they are worth $3k and go no lower. BUT then you have to allow $500 to $1000 a year for repairs and maintenance.
Amenity. You need to car to get to jobs to earn money. The value of having a reliable car should not be discounted.
Security. New cars are virtually impossible to steal. Immobilizers and such. Also it is older cars that appeal to strippers for parts because of their age. 1990 Commodore is the most stolen car in Aus due to parts and poor security.
Mazda 3 (the new name for 323) is an excellent car and 3rd highest selling car on the road. Will have excellent resale in future due to Mazda rep, everyday nature and popularity (sadly not an Alfa trait)
Insurance will hurt from her rep but again insurance is less prorata on higher value than older cars.
GO the LOC . Forget about the loan idea. With a deposit and proven history using credit cards bank will always loan money.
Lastly, consider a demonstrator. We saved 10% on Alfa for 2000km and two months warranty. Also say NO to any feature such as window tint, door mats, treatments, etc....
A call to a direct supplier can save you usually 25 to 50% on the price the quote you and or discount you. Get the base model as this holds it value best.
Regards, Peter 147
PS I acknowledge the irony that and Alfa Romeo driver is giving advice on how to save money with a car purchase considering they are a stupid purchase from a hip pocket factor.
Thanks for all the good advice
What I love about this forum is the diversity of view points.
I think I will print this thread and give to her to read and digest (indigest ).
Ausprop - any tips for avoiding rrp?? Urban gossip here in Canberra would suggest that the local car dealers are not user friendly, that there is so much spent from government that they just don't deal
I catch myself indulging in the fantasy that when I learn something new or progress that I can tell my kids, they will absorb same and venture forth from an advanced position. But alas, it seems that they need to make their own mistakes
Will post the outcome.
Thanks again
Bawley
What I love about this forum is the diversity of view points.
I think I will print this thread and give to her to read and digest (indigest
).Ausprop - any tips for avoiding rrp?? Urban gossip here in Canberra would suggest that the local car dealers are not user friendly, that there is so much spent from government that they just don't deal
I catch myself indulging in the fantasy that when I learn something new or progress that I can tell my kids, they will absorb same and venture forth from an advanced position. But alas, it seems that they need to make their own mistakes
Will post the outcome.
Thanks again
Bawley
several ways to avoid RRP - negotiate driectly face to face or you can do what I did once quite successfully - just make an email offer to purchase worded quite nicely and saying they are welcome to take up the offer if they wish (try to get a feel first tho for what you reckon you could get it for). Failing that, you can use a car buying service such as http://www.privatefleet.com.au/
or have a scratch around on www.discountnewcars.com.au. There are many broker services around. Don't forget it's a free country - buy your car in the NT and truck it down if necessary.
good luck and have fun!
or have a scratch around on www.discountnewcars.com.au. There are many broker services around. Don't forget it's a free country - buy your car in the NT and truck it down if necessary.
good luck and have fun!
Bawley,
Read this for car price negotiating tips:
http://www.dtvforum.info/index.php?showtopic=15368
Read this for car price negotiating tips:
http://www.dtvforum.info/index.php?showtopic=15368
If my daughters experience is anything to go by she shouldn't have any trouble getting finance.
3 years ago my daughter was left with a stack of bills to pay off by her ex boyfriend, had no savings and no car. She moved back home, changed jobs and I was giving her a lift to work in the morning and she was finding her own way home in the afternoon. She whinged and moaned how she wanted a car and I said no-one will give you a loan becasue you don't have any savings and you don't have a secure job yet as you're still in your 3 month probation phase - she'd been there 2 weeks at this stage.
Without my knowledge, she rang the bank anyway to ask, and over the phone was approved for a $13,000.00 loan and a $2000.00 credit card!! She cleared her debts and bought a car and hasn't looked back since!
She got the loan through the Commonwealth Bank.
Cheers
Olly
3 years ago my daughter was left with a stack of bills to pay off by her ex boyfriend, had no savings and no car. She moved back home, changed jobs and I was giving her a lift to work in the morning and she was finding her own way home in the afternoon. She whinged and moaned how she wanted a car and I said no-one will give you a loan becasue you don't have any savings and you don't have a secure job yet as you're still in your 3 month probation phase - she'd been there 2 weeks at this stage.
Without my knowledge, she rang the bank anyway to ask, and over the phone was approved for a $13,000.00 loan and a $2000.00 credit card!! She cleared her debts and bought a car and hasn't looked back since!
She got the loan through the Commonwealth Bank.
Cheers
Olly
Hi All
Having recently bought a new car and sold and old car here are my points.
SELL OLD
You will always get more privately. I was offered $22 to $23 for the Alfa 147. No way. I listed at with three websites at $29,500 then $28,000 eventually selling for $26,000. So I gained $3k which is what the books say. All over a three week period.
Wesite are good. They give you stats on how is looking. For instance.
Your small ad viewed 2162 times and your large ad viewed 255 times
I recommend Car sales and Car point both $10. I do not recommend Carguide and it seems to be dealer focused. Often when I searched I could not find my ad yet they keep pushing dealer cars?? I don't think I even got 1 enquiry.
Web advertising works but you need photos of the actual car. I lost a week selling on this point here.
Overall I got around 15 enquiries which taught me.
Most are not serious. Just testing the waters. Really not looking to buy. Such as:
A lot had no idea what an Alfa Romeo 147 Selespeed was. More than once I had an enthusiastic email and even call from someone who then said at the end....they had never been in one, driven one, read a review, etc...
Buying a car with no DD is stupid. Lesson here is to pre-qualify caller and to direct then to Alfa website so they can learn/understand. I am selling a car, I am not a new car salesman.
Some low ball and what I call poor ball.
One woman offered $23. When I said I can get that at a dealer she came back a week later and offered to match the $25k offer I had??? Again why would I screw the first person?? I think she thought it was a game of poker. She is worst type of buyer. Sight unseen offers to match others which you know will fall over when she comes to see.
Other talk all about it and then say we only have $21k max! Thinking I will take pity. I wanted to say "you are dreamin or this car is not for your pocket" but I didn't.
In the end we were looking for an honest buyer who wanted to drive and Alfa. Along came Carlos. He had the money, in cash, and drove the car the way I do with passion. He didn’t haggle tyre wear typical for a car with 30,000km or getting a mechanical check. As he said it had 10 months dealer warranty so why bother?? Saw it on Sunday and took it away Wednesday lunchtime.
More later, Peter
Having recently bought a new car and sold and old car here are my points.
SELL OLD
You will always get more privately. I was offered $22 to $23 for the Alfa 147. No way. I listed at with three websites at $29,500 then $28,000 eventually selling for $26,000. So I gained $3k which is what the books say. All over a three week period.
Wesite are good. They give you stats on how is looking. For instance.
Your small ad viewed 2162 times and your large ad viewed 255 times
I recommend Car sales and Car point both $10. I do not recommend Carguide and it seems to be dealer focused. Often when I searched I could not find my ad yet they keep pushing dealer cars?? I don't think I even got 1 enquiry.
Web advertising works but you need photos of the actual car. I lost a week selling on this point here.
Overall I got around 15 enquiries which taught me.
Most are not serious. Just testing the waters. Really not looking to buy. Such as:
A lot had no idea what an Alfa Romeo 147 Selespeed was. More than once I had an enthusiastic email and even call from someone who then said at the end....they had never been in one, driven one, read a review, etc...
Buying a car with no DD is stupid. Lesson here is to pre-qualify caller and to direct then to Alfa website so they can learn/understand. I am selling a car, I am not a new car salesman.
Some low ball and what I call poor ball.
One woman offered $23. When I said I can get that at a dealer she came back a week later and offered to match the $25k offer I had??? Again why would I screw the first person?? I think she thought it was a game of poker. She is worst type of buyer. Sight unseen offers to match others which you know will fall over when she comes to see.
Other talk all about it and then say we only have $21k max! Thinking I will take pity. I wanted to say "you are dreamin or this car is not for your pocket" but I didn't.
In the end we were looking for an honest buyer who wanted to drive and Alfa. Along came Carlos. He had the money, in cash, and drove the car the way I do with passion. He didn’t haggle tyre wear typical for a car with 30,000km or getting a mechanical check. As he said it had 10 months dealer warranty so why bother?? Saw it on Sunday and took it away Wednesday lunchtime.
More later, Peter
bawley said:
Hi Bawley,
There is a facility to borrow against the shares at 8% (And keep the shares)
This does create a credit history; and with the added bonus of the distributions meeting the costs.
Then of course continue to save the amount back into shares as cashflow permits.
Regards,
Steve
Olly said:
Heh, well...
My sister tried to get credit card for $2000 and succeeded. She just passed the criteria for getting it, i.e. job, low expenses, etc...
Se then maxed it out within a couple of months, lost her job, leeched the parents for money so she could pay the minimum repayments, leeched more money from the parents for buying junk off of eBay, etc...
I tried to get a $2000 credit card, but was declined. I knew that my job, (sporadic casual), wouldn't satisfy the bank's computers, but I still have the job, never leech off of my parent's money, etc...
Bank criteria are amazing sometimes...
This leads me to a question: To get finance for the first IP, would one need to have a credit card for a "credit history" check, or does this not matter?
Thanks.
