Financing a car...Best way to do it?

[deviant]

So I want a new daily (with the occasional on track hoon and I need somewhere to stick my PH stickers) and I am rather taken by a Focus XR5 / ST.

Ex Demo models that are barely run in can be had for $35K and the new LV shape that has just been launched is available for delivery right NOW in Perth for $40K-ish. Not sure I can stretch that far though so I am looking at a 2006-07 model for under $35K

Snag is though that interest rates on personal loans and car finance are at a quite silly 15% at the moment...this means that if I want the car paid off in a respectable amount of time I need to spend $400 / fortnight of which $200 will be on interest alone!!!! Using the mortgage is not an option as we only moved in a few months back so dont have the equity to secure the car against.

So can anyone offer any advice to financing a car and not going broke doing it?

[Colonial]

I have mine at around 10.5% and only got it a month ago. Through NRMA car loans so probably whatever the WA equivalent is of the RAC. Used car as well.

Through Savings and Loans Credit Union in SA. Was the best both me and a finance bloke I know could find.

[deviant]

Well I'll be...maybe I will be able to get me a new toy

Cheers Colonial..

[PomBstard]

Can you salary sacrifice at work? Can often be used for used cars too, doesn't have to be new. Also check out places like Private Fleet that order new cars for private customers as part of a larger fleet order - often savings to be had that way.

[deviant]

I think we can salary sacrifice...but I'm fairly sure I have read its only really worth doing if you do lots of miles?

Will check out fleet stuff..cheers!

[deviant]

So I have heard around the traps that any tom, dick or deviant can legally set up an ABN and lease a car to themselves?

I have also read that if your partner has a decent enough wage he/she can set up an ABN and lease the car to you....so your partner has all the payments in their name and you get the car?

Any truth to these?

I fancy the idea of a lease because I can give the car back at the end instead of spending years and years in silly debt.

[tim the pool man]

Look very carefully at the pros and cons of leasing against buying outright. A lot will depend on your tax situation so best to get expert advice first.

Salary sacrifice rarely works for employees, a mate did a novated lease through salary sacrifice and he reckons it cost him more overall.

The exceptions are in certain businesses (eg Catholic education) where the employer is taxed as a charity, and thereby gets 50% discount on FBT... my ex wife is a teacher in the state system, a few of her friends (in Catholic schools) were on about S/S their cars, mortgages etc; I couldn't understand how that could work until I found out about this loophole

[Colonial]

Leasing did not work out at all well for me. For amount of effort involved it would cost me more than a straighforward car loan.

But check it out, works very well for some.

[deviant]

Cheers guys. I had an ask around work and the guys that have had a lease in the past reckon they wouldnt bother with it again unless they were earning silly money...but then they might as well just buy the car outright.

I have been looking on cannex.com.au and there seems to be a decent range of finance available for 7-11%.

Now I just ned to try and match up selling the astra, getting a loan and sourcing a car to all meet up within a day or 2 of each other!

[Fiddlemesticks]

Unless you have a credit history from the UK, apply for credit there at 7% and finance it from oz. Cheeky and a little rule bending required but damn it could be a lot cheaper.

Let me know how you go as i might be in the same position for myself in 9-12 months.

Why did some of the guys not like leasing?

Also what Astra have you got - specs/prices etc!

[deviant]

Fiddlemesticks said:

Unless you have a credit history from the UK, apply for credit there at 7% and finance it from oz. Cheeky and a little rule bending required but damn it could be a lot cheaper.

Let me know how you go as i might be in the same position for myself in 9-12 months.

Why did some of the guys not like leasing?

Also what Astra have you got - specs/prices etc!

Fringe Benefits Tax (being taxed on luxury items provided by your employer on top of the pre-tax money being taken to pay for the car) meant that they didnt really end up any further ahead than buying a car themselves so they gave up on it. I think it works much better if your earning $100K+ or the car is entirelt supplied by your employer.

Astra details:
2003 TS 2.2L SRI, manual 5spd
Alloy wheels
92,000KM
Black with black interior
CD, A/C, power steering, elec windows + mirrors, ABS, TC, Airbags
$12K...make an offer

[Fiddlemesticks]

give you $9k! hahahaha.

Sounds pretty decent hey.

[deviant]

Well i'm not sure exactly when it is going to be on the market in which case by the time I do sell it the price may well come down.

You have been here far to long and allowed your stiff upper lip to become all spongey and weak if your ending a sentence with "ay"

[Fiddlemesticks]

deviant said:

Well i'm not sure exactly when it is going to be on the market in which case by the time I do sell it the price may well come down.

You have been here far to long and allowed your stiff upper lip to become all spongey and weak if your ending a sentence with "ay"

I think you'll find old chap that it was hey. 'ay is what cockney's feed to 'orses.

Or now i'm an aussie perhaps i should have said aw yeah.

[tim the pool man]

Should really have been "eh what old chap?"

[Mattserati]

I have a guy who finances all my cars, and couldn't recommend him highly enough. He just sorted me out with a new one last week. I won't put his name up here, but if anyone would like his details, let me know. The rates for finance depend on the amount borrowed, and the assessed "risk" of the borrower, but I have just secured a rate far better than what has been mentioned above. I would also advise seeking a good accountant to work out when and how to finance, if it is a vehicle that can be used to offset tax.