Use Isa cash or use finance

[callyman]

Sorry if the answer to this is obvious (which I'm sure it is)

I'm looking at getting a car shortly @14k

A bank loan for that amount is 5.8% over 48 months. COI = £1,689.76 @ £326.87 PM

Or do I take the 14k from a Cash ISA with £22.8k in it (to which im adding £50 Pm). Interest on this is 4.6%,(paid montly) and pay it back @ 300-350 PM

My Gut is telling me to use the ISA £, even though i will lose X amount of interest it's paying me monthly.
Thoughts?
TIA

[xeny]

Arithmetically I'd take it from the ISA.

However, it would also depend on what other commitments I had and how secure my job was.

There's a certain peace of mind in having some "just in case" money available which only grows when you have a family/mortgage to pay/job you're not sure if it will exist in 12 months time.....

[callyman]

xeny said:

Arithmetically I'd take it from the ISA.

However, it would also depend on what other commitments I had and how secure my job was.

There's a certain peace of mind in having some "just in case" money available which only grows when you have a family/mortgage to pay/job you're not sure if it will exist in 12 months time.....

We are mortgage free so using the Isa cash is less of a risk to us.
Work wise, we are pretty secure, we manufacture fixtures and fittings for National Grid so what with the huge expansion down the east cost, we should be good.

Edited by callyman on Sunday 17th March 20:31

[12TS]

There’s a longer term compounding on the ISA. If you were to leave it in there and keep contributing the max over say, 10 years there’d be a loss as well.

£1.6k of interest will take a bit of earning though, so I’d use the ISA.

[callyman]

12TS said:

There’s a longer term compounding on the ISA. If you were to leave it in there and keep contributing the max over say, 10 years there’d be a loss as well.

£1.6k of interest will take a bit of earning though, so I’d use the ISA.

If I left the ISA alone and carried on adding £50 PM, id earn £1600 in 18 months which is the cost of a bank loan over 48 mths

[Simpo Two]

xeny said:

Arithmetically I'd take it from the ISA.

It may make sense arithmetically, but then it's a chunk of ISA allowance spent that you won't get back which is hard to quantify over x years.

Unless it's a flexi-ISA in which case you can pay the money back in within a certain time, a year IIRC.

[callyman]

Simpo Two said:

xeny said:

Arithmetically I'd take it from the ISA.

It may make sense arithmetically, but then it's a chunk of ISA allowance spent that you won't get back which is hard to quantify over x years.

Unless it's a flexi-ISA in which case you can pay the money back in within a certain time, a year IIRC.

Yes, as far as I know, even if you've used your 20k allowance in a given year, you can withdraw an amount and put it back in the same year and it doesn't add to your annual allowance.

EDIT to add, just checked on my ISA, it's a fixed term 1 Year ISA and can only withdraw up to 10% 3 times, so that's only just over 6k so that's that then.
Bank loan it is.
Thank for the input though.

Edited by callyman on Sunday 17th March 21:48