jules
beautiful shark
Posts: 163
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Post by jules on Feb 16, 2005 22:00:27 GMT 10
i want to buy a new car. i have $30000 in the bank but thought it may make sense to keep my savings and just get a car loan. ?
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Post by singingcirclesaway on Feb 16, 2005 22:08:38 GMT 10
What car are you looking at getting? Maybe spend some and save some. What kind of account are you keeping your savings in? Non-banks like ING give you awesome interest rates, though you have to pay tax on any money earnt as it's considered an income, I don't know if there's a way around that. Maybe speak to a professional, they'd know way more than most of us here.
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Post by loux2 on Feb 17, 2005 4:50:12 GMT 10
hehe, yeah, i learnt about that tax thing the other day, a whole bunch of us (about 90% of the room) didn't know you had to declare it and therefore haven't been.
i'm sure it's the same with lots of people.
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Post by singingcirclesaway on Feb 17, 2005 10:54:53 GMT 10
Will they get you if you don't? It sucks balls that you have to. Maybe I wont next time.
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jules
beautiful shark
Posts: 163
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Post by jules on Feb 17, 2005 11:20:11 GMT 10
i have it in a non-bank. you have to pay tax on interest earned in any bank accounts, not just non-bank. i've had to declare $2 before. the bank usually sends me a letter around tax time with what interest ive earned and need to declare. judging by this i wouldnt risk not reporting it. $2 wouldnt even make a difference to your overall earnings, but if it was anymore i would make sure i declared it. if they can show you try to deceive them its considered fraud which is a serious, as you have signed and declared it as fact, and you can go to jail for years for it. not worth the risk.
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Post by singingcirclesaway on Feb 17, 2005 13:58:18 GMT 10
When I was doing my last tax return it said not to bother if it was under $5 or something. Can't remember.
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jules
beautiful shark
Posts: 163
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Post by jules on Feb 17, 2005 15:13:32 GMT 10
i guess thats new. this was about 4-5 years ago I had to declare the $2. back on topic i thought it best to keep my savings and get a car loan but everyone says it always better to pay out loans with savings because you lose so much money on interest. i see how that makes sense with a credit card but not with a car or personal loan. anyone had one? can tell me a good bank to talk to?
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Post by Catfish on Feb 17, 2005 17:19:19 GMT 10
i guess you might look at it like this,
if the interest (credit) you will earn on your savings is greater than the interest (debit) you will have to pay on the loan over hte laon period then you should get the loan and pay the interest (debit) from the loan.
else use your savings.
the other thing with getting a loan is that you will get a credit rating, which is a good thing as long as you pay credit/loans off. whereas using your savings you wont. even if you were to use your savings, you'd probably be better off getting a loan and then paying it off with your savings for the sake of a good credit rating.
if credit rating is of no consequence then forget the paragraph above.
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Post by pinstripeme on Feb 17, 2005 18:22:02 GMT 10
definitely just pay for the car with your savings, there's no"bank" that will pay enough iterest to offset the interest you will pay on a personal loan (which is what you would need to buy something such as a car)
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jules
beautiful shark
Posts: 163
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Post by jules on Feb 17, 2005 19:52:21 GMT 10
that is very good advice mr. fish but as pinstripe said may not work if its not more. but thankyou, i never though of it like that before. and also about the credit rating, good idea!
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Post by Dazza on Feb 18, 2005 18:03:35 GMT 10
I dont think you should worry about getting a credit rating, If you can show a good history of savings that is as good a credit rating.
I suggest buy the car with your savings......chances are your only earning 5 - 5.5% intrest on your savings.....finance for a car will probably be minimum 8% more if your buying used
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jules
beautiful shark
Posts: 163
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Post by jules on Feb 19, 2005 21:34:16 GMT 10
i'm glad i asked. the advice everyone has given has been heaps helpful. i'll look into it some more and tell you all what i decided and what shiny new car i'm gonna get!
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Post by thebankrobber on May 13, 2005 0:19:58 GMT 10
Any news on your car Jules? Also, you may want to think twice about spending that much on a new car. You could get a pretty decent second hand car for around $2000-$5000. If that is the only savings you have, you can earn interest and build on that money if you keep it locked in the back, or invest it in property or shares. If you buy a new car with it, it's not a very good investment at all because you will lose a lot of money in depreciation. But on the other hand if you or your parents are totally cashed up then go for it.
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