Finance

[mcoppen]

I currently owe £13000 on my 1.6, as had a 1.2 before it and had some negative equity on it. Want to trade up to a 182 in november when im 21 and have had the 1.6 for a year. Should get about £6500-7500 for the 1.6 as it will have about 8000miles on it. So leaves me with about £5500. Should i take out a £15000 loan and pay the £5500 off and get a second hand 182 for £9000-10000? or go new again? The apr on going new again will probably be the 14% mark. Which will add about £4k t the price of the 182. Which is silly amounts. Where as a loan will be about 6%. The loan will be about £325 for 4 years. Which can easily do. What do people think?

 

[edde]

Id pay off the loan on the 1.6 first. Then buy a cheaper 172.

Your just getting yourself into bigger and bigger dept. On another year youll want to trade in for somehting else and youll be £7.5k in negitive equity. Thats a lot of money.

Can you realy see yourself keeping a 172/182 4 years? Dont forget youll be paying £325 a month ever month for that.

 

[ViolentJ]

£325 a month for 4 years is a lot. Are you in a secure job that you can see yourself staying in?

 

[mcoppen]

Yeah i can to be honest. Real renault nut, and 182 is all i want. Been paying more than that amount for the last 2 years any way and perfectly happy doing it. If i cleared the 1.6 and got a second hand 182. Only be 15k in debt. Which is nearly what im in now. And can easily manage that. Got no ther monthly payments coming out. Job wise im living at home and im at uni. Will be for another 2 years. N0t paying any rent or bills. Working 30hrs a week at sainsburys, Plus helping at my uncles bar. So making about £750 a month.

 

[davyboy]

Wwhhooo there fella!

You only earn £750 per month and will be spending half that on finance? Plus you have insurance, tyres and servicing to take care of?

Take a bit of advice from an old man;

"Do not, not ever, ever, owe more than your assets are worth"

15k debt on a 9-10k car is finacial suicide.

Dave

 

[edde]

If I were in your position this is what Id do either.

Keep the 1.6 any pay off the loan at a rate of however much you can afford. Even at £325 a month your still looking at 40 months.

Sell the 1.6 and get a personal loan for £10.5k then buy a Mk1 172 for 5k or a higher milage Mk2 for £5k. Then pay off the loan at say £325 a month (you said you could afford this) over say 3 yrs.

If you can save your £ and wait till the new 192 comes out next summer and youll least be in a finantial situation which wont leave you with no money

Dont go get yourself in more debt. Borowing is easy, paying back is when it becomes a problem.

Can you realy see yourself 2 yrs from now still wanting the 182 I can imagine youll want a new or almost new Mk3 Clio 192 for £15k you 182 will be worth £6k and youll still owe say £7.5k on that car. £7.5k negitive equity on a car is a lot of money especialy as its 3 yrs old so no warently. Also youll have been paying £325 a month (which to anyone is a lot of money) for the past 4yrs and ended up £7.5k worse off than you started.

 

[mcoppen]

Right now im paying £258 on my 1.6, plus £120 insurance. That £750 is entirely dipsoable income. Will be at uni for another 3yrs, and certainly no reason why ill be moving out. So financial situation wont change. No reason to leave sainsburys. And if i do that sort of job is easily aquired.

 

[interceptor]

Agree with most of the prev comments-Dont over stretch-I went to a £20k MINI Cooper S form a £15 MINI Cooper as topped up my loan-Worst thing I ever done.
I now running a MINI Diesel for Cheapo costs and hoping to go to a 172 for abit more zip and lil bit less money

 

[edde]

Quote: Originally posted by mcoppen on 29 July 2005

Right now im paying £258 on my 1.6, plus £120 insurance. That £750 is entirely dipsoable income. Will be at uni for another 3yrs, and certainly no reason why ill be moving out. So financial situation wont change. No reason to leave sainsburys. And if i do that sort of job is easily aquired.

Whilst it sounds a nice idea I would never goet myself into a finance situation like that personally. Plus your looking at gettng the loan over 4 yrs and youll only be at uni 3 rs whats going to happen in the last year of the loan you might have to move out of house and a £325 a month finance burdon is a lot to deal with.

Id take note of everyone comments on here weve all been burned by finance in the past and dont wish it to happen to others. Unfortunatly just as we say the cookers etc is hot they still touch it to check.

If you ever had a crash in the 182 (and it does happen) and wrote it off youve be in big problems as yud probabyl end up with a £325 a month loan for however many years and still need to borrow even more to buy another car.

 

[mcoppen]

Yeah edde see what you mean. What i might do then is wait then and clear the 1.6 off. Then get the 192. Will be out of uni by then and when i get my proper job and have settled down get the 192.

 

[mcoppen]

Ok what if i get a £10k loan for 3years at £302 a month. Which i can do easily. Then pay of my 1.6 and the negative equity i already owe. Then with the remaining £5k by a 172? Be clear by the time i leave uni. Have no outstanding debs and have a clean slate to go for a 192.

 

[davyboy]

But youll still owe 10k and only have a car worth 5k.

 

[mcoppen]

True. Dunno what to do. Might just keep the 1.6 and spend some money on it. To be hoenst perfectly happy with it. But want a 182. If i spend bit on it to make it look better and go faster be even happier with it. Plus it makes more sense and wont be getting into silly amounts of debt.
Thank you guys for all your help. Really helped me!!!

Mike

 

[davyboy]

If you have spare money - you should increase the payments on your loan, rather than waste the money on your car.

 

[mcoppen]

Dont think i can do that. Anyway, not really in a rush to pay it off. But may look into it. Plus wheres the fun in not spending money on your car?!! Whole point off them. Cars are me hobby, always spent money on them.

 

[davyboy]

Rather than spend money on them, why not spend money using them? I try to not spend money on my cars, but have fun using them.......I dont see the point in just spending money on them with no ultimate goal.

Trackdays, nurburgring etc.

 

[mcoppen]

Yeah i know what you mean. But if im going to keep it for another 2 years then want to make it bit better, so i can do stuff like take it to track days. Like get some coilovers and decent tyres on it. Dont mean stupid drive it through halfords with superglue on it mods. Just a few well worth performance upgrades to make the whole driving experience more fun.

 

[davyboy]

....or what until someone upgrades there cup or 182 and sells ther esuspension and stick that on. Its really not worth putting coilovers on a 1.6. Itll proably sell easier with genuine Renault suspension on than KW or something else that "most people" will not recognise.

Listen to uncle davyboy, I know people will tell you that lifes for living etc and just get what you want. But , you are alive a long time and you dont want to be one of these muppets on the next ocean finance advert!

When you are as old as me (33) you will want to have your own house, car, lawn mower etc, you dont want to be paying for mistakes you made 15 years ago.

Dave

 

[madman1981]

same thing happend to me as whats happening to mcoppen best thing to do is sell the car by a cheap banger rough it for a year when everything is cleared and then get your self a new car.

i stuck with my old ax for about a year and saved hard paying everything off, now ive finshed uni earning much more money ive got my self a brand new 14k car and owe nothing on it at all, a year of hardship driving a sh*tty banger goes a long way.

also your almost 21 and taking on finance which may take 3-4 years to pay off, do you really still wanna be living at home when your 24 or so?

 

[mcoppen]

Yeah it is worth it. For only like £500. Is not a major investment. Can easily take them off. Joys of having a mechanic as a best mate. Modded up most of my other cars. Will be totally clear of debt in 2 years. Have no other loans, including student, and dont even have an overdraft. lol. So doing pretty well considering most peoples credit card debts. Can easily manage my current car payments and still live it up. Got to have some fun before i get old. lol. Not in any financial problems at all. Was just asking what people thought about going up to a 182. Which now i look at it will get me in financial problems and would be a stupid thing to do. But at the moment not struggling at all. If anyhting it has taught me how to manage my money, as i have to make sure i have the right amount of money in my accout for when its needed. So its not all bad.

 

[Chili Red]

I made the mistake once of buying a brand new car instead of buying my first house, and OMG I regret that decision. Youd do better to save the cash for a deposit on a house, youll be thankful one day in the future.

Dont take out a massive loan, there will always be Renault Sports cars. A Clio 1.6 is a FAR better car than I had right up until the age of 30!

Anyway, who am I to give you advice? Do what makes you happy, but just consider how youd pay it off quickly if you had to.

 

[badinvincible]

Just keep the Zonda FFS.

 

[davyboy]

I have more fun now I am old, than I ever did

 

[mcoppen]

Quote: Originally posted by badinvincible on 29 July 2005
Just keep the Zonda FFS.


Well obviously if i get in problems coud jst sell that. lol

 

[Thomss]

You can get some very cheap loads these days, I am paying £500 for lending £6000 over 3 years. Thats with Cahoot.

 

[GarethM]

id stick with the 1.6 and wait until the new RS MK3 comes out then maybe trade in.

 

[Daniel]

Mate, Im a salesman at a renault dealership.
Speaking proffesionally and personally,
ive Been in your position myself a few years back,
and i can honestly say that the best thing i ever did was
get myself out of it! its never worth
getting into that much debt over a car.

 

[mcoppen]

Ok, been doing some further research into it and have come up with a few questions. A large part of that 13k is interest, as im paying 14.1%. without it only actually owe £8250 on the car. If i take the car back now and start from scratch do i still pay the interest? Im assuming i dont. In which case going by the parker guide of about £6125 for my car will only owe £2125 on it. Which is easily achievable without the aid of a loan. Then will be back at the start and have a bit more freedom to get what car i want without getting into silly debt. Thanks again, and sorry for my ignorance, But im only young and im relying on the wise words of the more experienced cliosporters.
Thanks,
Mike

 

[clarkiev6]

someone else who cant sleep...lol

 

[mcoppen]

Lol. Mate this is driving me made. Have insomnia. Im one of those impatient people that wont stop till something is resolved. Just lie in bed thinking about it otherwise. Lol. Whats your excuse?

 

[clarkiev6]

bloody kids......lol

 

[mcoppen]

Lol. Well feel sorry for you there mate. At east i have relative control over not going to sleep.Have to be up for work in 3 and a half hours. Oh joy. lol.

 

[edde]

Quote: Originally posted by mcoppen on 31 July 2005
Ok, been doing some further research into it and have come up with a few questions. A large part of that 13k is interest, as im paying 14.1%. without it only actually owe £8250 on the car. If i take the car back now and start from scratch do i still pay the interest? Im assuming i dont. In which case going by the parker guide of about £6125 for my car will only owe £2125 on it. Which is easily achievable without the aid of a loan.

Talk to your finance company some companies ensreyou pa th nterest of h loan fist so say after 4 month of 13k loan you wan to pay it of you pay £13k an he mone you have paid is kaken as interest over th whole term.
Some companies though will let you pay the remaining balance of the finance ie in the above case you pay maybe £12,3k.

 

[andrew_172]

Yes, ring the finance company and ask for a settlement amount. They will then discount the amount (usually) based on the interest you have paid or still owe. Having said that it may only amount to around £1000 or so off the total left to pay.

Other than that, dont change - not yet!! I have also been there (several) times where I want to change my car and have negative equity. If it was maybe £1000 then not so bad and maybe you could have put in cash to make that up but I would say the amount in this case is too risky.

A 1.6 is still a really nice car. Why not think about spending a small(ish) amount now and do a few mods to it to spice it up a bit until you can really afford the 182?

Andrew

 

[Ben H]

There is a set formula for calculating interest on a loan and how it is paid back during the life of a loan.

Most people think that their loan payment (of say £100) will have a fixed interest element (e.g. £10 if 10% rate). Unfortunately its a lot more complicated than that and Ive worked out an Excel speadsheet to show how much you pay over the term of the loan. I only have it at work, but you may find something similar with some sleuth work on a search engine.

The effect is that the first payment of said £100 is really about £30-£35 interest, reducing to almost none at the end of the loan repayment period.

Basically, once youre in a loan, its expensive to pay it off at the start and your repayments make less of a dent into the overall debt.

That doesnt answer your dilemma, but hopefully the info will be useful. See http://www.fool.co.ukwww.fool.co.uk.

 

[mcoppen]

Thanks for your replies. Going to ring them tomorrow and see what they say. Lets hope its good news. Will post up when i know, and what i decide to do.
Thanks again,
Mike

 

[SimonD]

My first post on here was about insurance and my second is about car finance. Im not boring, honest!

As others have said, avoid getting into debt if you really can. Ive been there and its not nice. Car finance is the worst and worth avoiding! My sis works for Nissan car finance and even she says avoid it. You can get loans for as little as 9% (maybe lower) so why pay upto 14% on car finance?

I also agree with the person who suggested driving bangers for a few years. I drove some complete tosh (Fiestas, Rover 200s) but at the same times I saved up for a few years. Was a bit hell, and my rover was barely going towards the end, but then one day I was able to walk into a Renault delership and buy a Clio. For Cash. Im picking up my 172 next week (second hand 04 car) which Im also paying cash for (plus a p/x on my Clio 1.6). If you work out how much interest Im going to lose on my savings versus how much finance would have cost me Im quids in. In effect, Im paying myself back rather than a finance company who have me by the short and curlies. If you can save thats best, but you have to be patient! People always seem to want things now rather than waiting a bit.

A few of my mates have also taken the banger for a year route. One of them drove an E reg Montego for a year so he could buy his Alfa 147...

 

[mcoppen]

Yeah but already in the debt. Really not bothered by it. Can easily afford it at the moment. But just want a 2ltr. Been my target to get one for 3yrs. Got a plan to get one an reduce my debt and more importantly the APR. But all depends on my phone call with black horse finance tomorrow. Will keep you posted.

 

[james24]

To be honest mate you cant afford it.

I had an Elise which I sold about 2 months ago now. I could just about afford to run it and keep it, and the car was always worth more than what I actually owed on it, but I started to begrudge the car instead of enjoying it because it was taking a huge amount of my wages each month. I sold it, got the spare money from it and bought my 172.

The feeling of owing no-one money and being paid each month knowing all the moneys mine, is a way better feeling than having an Elise.

Having the car of your dreams is great in the short term but you really have to think about how youll feel a few months down the line when the new feeling has worn off, and your stuck with a load of debt.

I wouldnt be able to sleep at night!

Also you say Im already in debt and that it doesnt bother you, thats no reason to get even more in debt! Trust me mate it will bother you when all your money goes to someone else each payday!

 

[clio_nut]

to be honest mate whatever people say it looks like youl do it anyway, just remember how everyone here regrets doing it. good luck with whatever you do,



andy