Car Advice 2 ...

[steven_tiger]

The wife's cruddy old Magna needs an upgrade.

Looking at a used car to replace it with (must be a family car as we have two kids).

Found a couple of nice ones at the local Ford dealer.

- 2008 Mondeo. 85000km, $17990.
- 2008 Falcon XT. 60000km, $Not 100% sure… I think it was about 20 grand
- 2008 Commodore Omega 60th Anniversary. 44000km, $23000.

The Commodore would be the favourite followed by the Falcon.

My question is this... what would people recommend as the best way to fincance the bloody thing. We have some savings, we could re-draw that amount from our homeloan (and still sufficiently infront), we could get a loan, or (I think) we could lease it.

Any opinions would be appreciated.

 

[underdog]

redraw.

it'd be as if you didn't feel it.

 

[steven_tiger]

That's my least favoured option Underdog. The house is more important than a car.

I reckon borrowing about 10-15K in a personal loan would be the way to go, but my wife doesn't want to do that for some reason.

 

[alexaki]

The best option financially…that requires a **bit of discipline** is to redraw the 10-15k from your homeloan….This is the cheapest interest option...meaning you pay back the least amount of interest.. compared to personal/car loans which range from 12-16%....The discipline I was refering to is to **ensure you increase your home loan repayments to cover the "extra loan" drawn out…to a period of no more than 5 years...**(what a personal loan runs for)….Many people who redraw on their homeloan repay the extra drawn over the rest of the term of the loan...and as a result pay back a huge amount of interest....stick to a 5 year period for the redrawn amount and redrwaning on your home loan is the cheapest money you can borrow.
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Leasing is a good option if you can tax deduct the lease payments from your tax...

 

[steven_tiger]

We already pay off $100 extra per week which will cut the home loan by 14 years. We could probably swing a little bit more into the home loan if needed.

 

[happy_tiger]

You could set up a veridian loan at the same rate as your home loan and put extra on it every week if you can afford it

That's what I did last year and when I went to back and got them to knock extra .75% off home loan they also knocked it off the veridian account

If you add the amount to your home loan you will pay far more interest on it but if that doesn't bother you go that way as if you have issues and can't pay it off it could take the house with it

Look into the veridian loan though it is worth it

 

[underdog]

The best option financially…that requires a **bit of discipline** is to redraw the 10-15k from your homeloan….This is the cheapest interest option...meaning you pay back the least amount of interest.. compared to personal/car loans which range from 12-16%....The discipline I was refering to is to **ensure you increase your home loan repayments to cover the "extra loan" drawn out…to a period of no more than 5 years...**(what a personal loan runs for)….Many people who redraw on their homeloan repay the extra drawn over the rest of the term of the loan...and as a result pay back a huge amount of interest....stick to a 5 year period for the redrawn amount and redrwaning on your home loan is the cheapest money you can borrow.
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Leasing is a good option if you can tax deduct the lease payments from your tax...

^^This - I was a little succinct in what I meant re redrawing - but this is essentially it.

 

[happy_tiger]

The best option financially…that requires a **bit of discipline** is to redraw the 10-15k from your homeloan….This is the cheapest interest option...meaning you pay back the least amount of interest.. compared to personal/car loans which range from 12-16%....The discipline I was refering to is to **ensure you increase your home loan repayments to cover the "extra loan" drawn out…to a period of no more than 5 years...**(what a personal loan runs for)….Many people who redraw on their homeloan repay the extra drawn over the rest of the term of the loan...and as a result pay back a huge amount of interest....stick to a 5 year period for the redrawn amount and redrwaning on your home loan is the cheapest money you can borrow.
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Leasing is a good option if you can tax deduct the lease payments from your tax...

^^This - I was a little succinct in what I meant re redrawing - but this is essentially it.

Thats why I suggested the Veridian Underdog it keeps you disciplined without having to pay 11-12% interest you would on a personal loan

 

[tigerdad11]

Good advice here Steve
Finance only if it gives some sort of tax benefit with your work .
Line of credit with CBA as mentioned would be the way to go , it gives you the lowest rate . Go with the Holden .
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[steven_tiger]

If I was already paying $100 extra a week on the home loan would I be right to leave it as is, or add more to that to pay off what a redraw (should we chose that path…)?

 

[happy_tiger]

If I was already paying $100 extra a week on the home loan would I be right to leave it as is, or add more to that to pay off what a redraw (should we chose that path…)?

Definitely pay as much as you are comfortable to pay off Steven the quicker you pay off any loan the less interest you will pay and the more you can put away for other things (retirement , holidays ,investments etc)
But mate if you are interested look into the Veridian loan (Its actual name is a Veridian Line of Credit or VLOC)
They sound really complicated but there not and it will decrease the amount of interest you pay that you would on your homeloan and still get the same interest rate