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  1. Post
    #1

    Buying car on mortgage

    Anyone bought a car and put it on the mortgage to pay for it? A lot of the research I've done assumes you'd pay it off over the life of the mortgage so its a bad idea etc. Looks like the only way to do it is put it on a revolving credit type mortgage (i.e floating).

    I'm considering doing this as my floating rate is 5.25%, much lower than what car finance would be. Weighing up repayments over 3 years it is definitely manageable , so is there anything I'm missing or not thinking off before I talk to my mortgage broker?

    Just to be clear I would have another, say, $30,000 in my floating mortgage and I'd make extra repayments so that it would be paid off in 3 years.

    TIA!

  2. Post
    #2
    Yep works fine. No point borrowing money from anywhere else when you have cheap credit ready to go. You should be paying off as much of the mortgage (revolving portion) as you can anyway. So adding a car to it won't change much. My fixed portion is over 30 years with minimum repayments. Revolving gives you the freedom to buy whatever, so always put money into this loan towards paying it off. Given it will be higher rates, even though those rates are relatively cheap currently.

  3. Post
    #3
    I used the mortgage as security but set up a separate loan, at the home loan rate, over a shorter term. This was with westpac via a broker.

  4. Post
    #4
    New or used? I see Toyota and some others are offering 3.9% interest. Is there some other catch as no bank is offering a better listed rate. Can somebody with more knowledge pipe up on whether manufacturer finance is better/worse than putting it on the house

  5. Post
    #5
    Its a loan with interest. It's the same and if the rate is lower its better.

  6. Post
    #6
    Same cost as cash buyer? Someone is paying the extra interest, it might be Toyota just to keep the new cars flowing.

  7. Post
    #7
    Meh... spending more than you have to on cars when they're a depreciating asset is not the smartest idea in the world quite frankly. The point of a loan is to double down on something that is worth money and make money... A house and land is an appreciating asset, cars are not. Buy a car you can afford not the one to keep up with Mr. Jones.

    Or don't listen to me and be broke, end up with nothing and live on the pension when you're put out to pasture at 65.

  8. Post
    #8
    Aren't you just Mr Sensible? I'd rather have my cool shit now and pay someone a few % interest for the privilege.

    Of course, I have plenty of income to service the loan and also take care of my retirement.

  9. Post
    #9
    roumelio wrote:
    tl;dr, don't listen to me
    ftfy

  10. Post
    #10
    GorGasm wrote:
    Aren't you just Mr Sensible? I'd rather have my cool shit now and pay someone a few % interest for the privilege.

    Of course, I have plenty of income to service the loan and also take care of my retirement.
    Nah... You just see those people every day... They have a cool car but nothing else to show for their life. I guess if that's what you want.

  11. Post
    #11
    You talk as if having a cool car and being successful are mutually exclusive. If that is your theory, you probably need to re-educate yourself on finances and how to succeed at life. Because you are miles off reality with that one. Even more so than normal.

  12. Post
    #12
    Roumelio wrote:
    Nah... You just see those people every day... They have a cool car but nothing else to show for their life. I guess if that's what you want.
    Top tip: Some people earn enough to both afford the car and the house.

  13. Post
    #13
    bmt, talk to the car finance people. It’s amazing what they will come up with if you tell them you can do it on your mortgage. If they can’t beat it, you haven’t lost anything, but you might be able to get in on one of those pay if off in three chunks deals with no interest (which is what I did). That way you only load your mortgage once/year and pay less interest.

  14. Post
    #14
    Cool instead of creating a new topic I’ll just ask my question here if that’s all right bmt?

    We are looking at buying a car in the 5k range.
    What is the best way to finance it? We never borrowed money to any finance company or bank since we arrived 5 years ago so we don’t have any credit score/history.
    Talk to our bank/loan broker? Anybody can advise a broker on Auckland North Shore?

  15. Post
    #15
    Bank should give you an unsecured personal loan fairly easily. I would avoid companies like GE Money and Instant finance myself and stick to your bank.

  16. Post
    #16
    Have your tried peer to peer like Harmoney?

  17. Post
    #17
    Your bank should give you a loan if you've been working for that five years.

  18. Post
    #18
    AnotherLeon wrote:
    Have your tried peer to peer like Harmoney?
    Just had a look and minimum is 3 years so a bit too long. Want to pay it off in a year.
    Yes we have been working for the 5 years we here.

  19. Post
    #19
    Take out three year loan, pay off loan faster ... I'm a lender on Harmoney, and craploads of my loans are repaid before term

  20. Post
    #20
    Ok I'll have a closer look then.

  21. Post
    #21
    gneiss wrote:
    bmt, talk to the car finance people. Itís amazing what they will come up with if you tell them you can do it on your mortgage. If they canít beat it, you havenít lost anything, but you might be able to get in on one of those pay if off in three chunks deals with no interest (which is what I did). That way you only load your mortgage once/year and pay less interest.
    Interesting, I'll keep that in mind. Going to have a look at some cars tomorrow.

    When I bought my current car in 2015 (new), I asked if they could offer a better finance rate than 9.95% or whatever it was and basically got shut down whoever I asked. Ended up paying cash.

  22. Post
    #22
    $@ked0wn14 wrote:
    Cool instead of creating a new topic I’ll just ask my question here if that’s all right bmt?

    We are looking at buying a car in the 5k range.
    What is the best way to finance it? We never borrowed money to any finance company or bank since we arrived 5 years ago so we don’t have any credit score/history.
    Talk to our bank/loan broker? Anybody can advise a broker on Auckland North Shore?
    How many KMs do you do a day? And how far do you drive maximum (eg, cross country road trips)?

    If 60-120KM/day and you don't drive long distances then finance a Leaf (~10k).

    60km/day = ~4.6L petrol/day (13KM/L) = $9.23 at $2/L.
    60km/day = ~8.5KWh/day = $1.36 at 16c/KWh (mine is 15.4c)
    260 driving days a year at $7.87 savings per day = $2,046.2 saved in fuel/year.
    Or $39.35 saved per week (excluding weekends)
    10k vehicle finance at the first link that would give a quote = $67/week payments over four years.

    AKA after fuel savings driving 60KM per day on weekdays only (so a massive underestimation), you would have paid an equivalent of $4,336.8 (67*52*4 - 2046.2*4) for your 2012 car after four years inclusive of interest and gotten a much nicer, twice as expensive car out of it.

    Additionally, after fuel savings your weekly payments for finance and fuel are:
    Petrol financed using the above calc (still assuming four years and no weekends and a petrol car that costs $5000): $9.23*5+33=$79.15
    Leaf on above (four years, no weekends, 10k finance): 1.36*5+67 = $73.8

    If you do 120KM/day, then you'll have saved more than the cost of the vehicle plus finance. And if you drive on weekends (likely) then that will factor into a lower price vehicle overall.

    60KM/day 260 days a year is 15,600KM/year, AA average is 14,000KM a year, so it's not an unrealistic calculation. The more KMs you do, the greater the Leaf performs (until you hit the range limit). So you don't necessarily need to do 60KM/day, just 15,600KM/year for all of the above to apply.

  23. Post
    #23
    An early Leaf isn't a car that you'd want to be driving 120km in though - even leaving aside that that's beyond the full range capacity of a reasonably priced one they aren't exactly pleasant at higher speeds or for long distances - very much set up as a short range commuter car.

    Don't get me wrong the Leaf is great for what it was designed for, I'm actually looking at one as a second car now but it isn't without its downsides.

  24. Post
    #24
    Disinfo wrote:
    An early Leaf isn't a car that you'd want to be driving 120km in though - even leaving aside that that's beyond the full range capacity of a reasonably priced one they aren't exactly pleasant at higher speeds or for long distances - very much set up as a short range commuter car.

    Don't get me wrong the Leaf is great for what it was designed for, I'm actually looking at one as a second car now but it isn't without its downsides.
    Unsure about the high speed issue, can you elaborate?

    And yup, the entire last post was based on 60KM/day, 260 days per year only, or 15,400KM/year (42KM every day). 120KM was a sidenote.

    I do 72KM/day in this on the motorway and it's fine at 100. Did 24,000KM in the first year, second year ends in June and likely will have done another 24,000. Probably needing new tyres soon and a wheel alignment, which will be the second maintenance it has had (first was windscreen wiper blades).
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    I absolutely wub it.

  25. Post
    #25
    That's soooo cuuuuute. How does it feel when you go roaring past a truck/trailer @ 100km/h?