Advices on a personal loan

[Oedipus]

I don't know if this thread is adequate for this forum but I need advices.

I would like to buy an used car. I want to take a personal loan from a bank. 2500 euros. That's about 40 euros monthly for 6 years and 80 euros for 3 years.

I work as a warehouseman with a 350 euros salary.

I woul like to hear your opinions and advices.

Thank you.

 

[LeadCrow]

2500 is not that much, but you'll be repaying more over time (6 years?!) than the value of that car, which will lose at least some by the time you repay everything. Keep in mind that you might need another future loan for say a house of starting a family.

Which car model did you have in mind, and do you actually need one. Unless you have specific transportation needs, public transport could be more adequate at least until you take a decision.

 

[Oedipus]

I am 21 years old and I don't plan on starting a family any time soon.

My work is 20 minutes away by walking.

I was thinking Golf 4 or 3, but I would need to do more research just to be sure.

The loan could be payed in 3 years with double playments.

 

[LeadCrow]

My work is 20 minutes away by walking.

It's a distance short enough to cover by motorcycle or even bicycle (little to no fuel or insurance recurring expenses) if public transit isnt available. I presume you had other uses in mind, but idk 21's a bit young for a first car. Maybe building up savings you could later dip in could be more advisable

 

[Nev_Dull]

I have to agree with LeadCrow. Used cars are the gift that keeps on taking. You need to consider not only the loan payments but the ongoing expenses (petrol/diesel, oil and fluids, regular maintenance, licence and insurance). With a used car, you can almost count on a few unexpected expenses along the way too.

Double check your figures. If your budget can handle all that, there's no reason not to do it. Otherwise, I'd consider options, like bicycle, ebike, or motorbike. Depending how environmentally conscious you are, an ebike is a green alternative -- and they are cool these days.

 

[we_are_borg]

The problem is your wage to loan ratio it very high for a car. To make it worse its going to be a secondhand so the upkeep will be higher and you will never know what it will cost. If the car is 10 years old it will have a lifespan of 15 years if lucky 20 years Keep this in mind.

 

[kolakube]

No loans. Cars are the biggest money sink for young men by far and just not worth getting into debt, especially not this deal as you've described. Bike or walk until you can buy a used car with straight cash, homie.

Source: someone who's done it and is much better off for it

 

[doubt]

No loans.

Can't get a better advice than that.
Do not get used to buy now pay later.

 

[zappaDPJ]

The problem with low cost used cars is they tend to incur the highest maintenance costs because of worn parts. Paying off a loan on a car you can't afford to maintain would not make for a happy driver.

 

[R0binHood]

If you only need it for work and you can walk there in 20 minutes I'd, walk, cycle, scooter, anything but drive if it means you have to buy a new car.

You'd save 15 minutes each way plus bit a bit of rain? If you have the cash (plus extra cash for fuel, insurance, maintenance etc) fair enough. If you need a loan to buy the car for a job you already have and can commute to easily without one, not a chance.

 

[Oh!]

I work as a warehouseman with a 350 euros salary.

I survived a very long time without owning a car. Sure, it can be inconvenient to not have one sometimes, but there are also many inconveniences (repairs and associated costs, and fuel costs too) with owning a car. And when you really need a car for a day, perhaps a friend will lend the use of their car, or you might hire one, or take an occasional taxi when you really too. It will still be far cheaper overall.

If you instead put aside the $80/month, you'd have the $2,500 saved in 31 months (actually, probably much sooner - no fuel, maintenance and repair costs). You might find that you save up the $2,500 in a year or so. Plus you will save on all the interest costs.

And, one more thing to consider: if the car turns out to be a dud, or you (heaven forbid), wreck it - depending upon your type of insurance and who's fault was the accident - you might well still be on the hook for any outstanding repayments.

 

[Dubbed Navigator]

A 20 mins walk to work is nothing.
Are you sure you NEED a car, or just want one?
The second, particularly at your age is perfectly reasonable by the way.

Take it from someone (or likely people) who have been there, done that, got a few t shirts.
Dont start getting into debt at your age for a car. Yes 40 euros sounds easy enough to pay, but it's really only a base cost. At 21 a golf in the UK costs quite a significant amount of money to insure for a start - I can't comment in other countries.
I'd be surprised if your actual cost a month wasn't closer to 200 euros, all in.
On your salary, that's a lot.

Enjoy being 21, and the usual perks of it. It won't come again!

 

[zappaDPJ]

At 21 a golf in the UK costs quite a significant amount of money to insure for a start - I can't comment in other countries.

That's a good point. My daughter's insurance on a 1.1L secondhand Vauxhall was close to £900 for the first year with no no-claims bonus.

 

[Oedipus]

Thank you all for your advices

I will not be taking a loan.

I have asked a friend, family members and they all said no. I will listen to them.

From today I will start saving money. I hope I will collect enough.

My goal is Renault Clio 1.5 from 2014 or 2017. I love that car.

 

[Bengie]

If you are determined to go ahead then make the bank repayments by direct debit on payday so you are very unlikely
to miss a payment.

For protection, take out a credit card, (just a small amount say £200) and use that to pay the first £100 of the amount
to the car dealer and then the rest with your loan.

Credit cards have a built in safety regulation and should something go wrong, (say the car breaks down) and the car
has to be returned for a refund, then you will be covered for the whole amount by the credit card regulations, in other
words if the dealer won't give you a refund then you can claim it all from the credit card company, I will say that bit
again, if you pay £100 with the credit card, then whole amount is reclaimable from the CC in a dispute.

 

[kolakube]

Thank you all for your advices

I will not be taking a loan.

I have asked a friend, family members and they all said no. I will listen to them.

From today I will start saving money. I hope I will collect enough.

My goal is Renault Clio 1.5 from 2014 or 2017. I love that car.

Awesome! Now let's figure out how to make money with a forum so you can get your car in no time... ?

 

[Oedipus]

Awesome! Now let's figure out how to make money with a forum so you can get your car in no time... ?

Hahaha, that's even more harder than collecting money (I think).

My plan is to make around 7000 euros. Used Renault Clio from 2017 is around 6000. The rest is to make it pretty. ?

 

[Dubbed Navigator]

Hahaha, that's even more harder than collecting money (I think).

My plan is to make around 7000 euros. Used Renault Clio from 2017 is around 6000. The rest is to make it pretty. ?

You'll need to add a bit more for the insurance if you tart it up...

 

[Oedipus]

You'll need to add a bit more for the insurance if you tart it up...

Where I live, most people do not have insurance for a car.

 

[paul_from_minibb]

Buying a car you should see its condition at first, how much it did run and you should "feel" it. What you see on the pictures, stands far from an ideal reality. IMO Renault cars are all pile of plastic and details un-mounting on the go. I still own Volkswagen IV of 2000, using it for 10 years and it's an excellent bee for those driving not so much (my traffic doesn't exceed 5K kilometers per year). I've bought it when it was having 135K on the odometer, the original value (I've bought from a trusted owner); now it is about 170K. I've calculated all my technical expenses for fixing the car, and petrol expense, and in 2020, they were about 0,15 EUR/km. This is not counting insurance (55 EUR/year) and technical review (105/year). These are expenses for the quite old car which eats 7-12 L/km of petrol. All in all, it is about 800 EUR/year - >2,5 of your monthly income. If you didn't drive far from your original city (but I am often doing it), then driving within a city is cheaper by Bolt or Uber, those you don't have an instant headache and pain in your ass.

If you buy a newer car, and especially some french plastic b.s., be prepared for even more expense. It could save you some money on petrol (but it depends on how you drive), but it definitely will eat your budget on supporting its mechanics.