Borrow or use savings to fund car purchase?

O

Orga

Registered User
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Hi folks,

A very simple question: Are there any advantages to borrowing for the purposes of buying a car as opposed to using savings - total to be borrowed =20,000

Thanks in advance
 
Re: To borrow

Am a stick in the mud but would not borrow to buy a car. Depreciating "asset" and all that.
 
Re: To borrow

Orga said:
Hi folks,

A very simple question: Are there any advantages to borrowing for the purposes of buying a car as opposed to using savings - total to be borrowed =20,000

Thanks in advance
Click to expand...
No - there are no advantages (except to the bank who will make money on charging you interest).
 
I've amended the title of this thread for clarity.

As RainyDay says, there's no advantage in borrowing (at what, 9% or 10%?) rather than using savings which are earning much lower interest — unless the savings are somehow 'tied up' in such a way that you would be heavily penalised for accessing them.
 
Are you planning on using the savings for something else in the future?

I would recommend that you keep a few thousand on deposit to cover unforseen circumstances and use the rest of your savings to part finance the car.
 
if you have the €20,000 to spare use it to purchase the motor. Find out how much the repayments are for a loan from wherever you intend to borrow from, then put that amount into an account each month etc . at the end of the 5 years ( or whenever) you will hve the orgiginal €20,000 and then some. easier said than done but worth a try
 
Buy as much car as you can afford -- without borrowing, if possible. If you can't afford a new car, maybe spend your savings on a used car? If your savings can't cover a good used car, borrow the difference and still buy a good used car.

Car loans are among the most profitable products the bank offers.

I've never borrowed to buy a car, and never will. It's a mug's game, if you ask me.
 
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