Car / Investment. Or both?

M

maggieann

Guest
I have €10k in my current. I need a car but also want to invest in some managed funds. Should I borrow for the car and invest the lump sum or buy a motor from my savings?

Please advise
 
Re: Car / Investment. Or both??

Thats the same as saying you are borrowing to invest? If you are determined to invest buy a good run around car for a €1000 and invest the rest. Thats what I would do. There are plenty of 2nd hand bargains out there especially at the moment. My brother is trying to sell his car which he maintained excellently and has 2 yr NCT for around that and has hardly got a call. Something like that would answer both criteria. If the vanity is a problem that will ensure a life of debt. The splashing should come later..
 
Re: Car / Investment. Or both??

Say you pay 9% interest for a car loan. This equates to a pre-tax return of over 11% on an investment. So you would have to be confident of earning over 11% on your investment in order to make money. So I guess you would be better off using your cash to buy a car. Then, take any money you would have used to make loan repayments and use it to invest in a fund monthly.

Very simplistic analysis, but I think it illustrates the basic point.
 
Re: Car / Investment. Or both??

Thanks, that was very helpful.
 
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