Car Financing
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I would like to know how of us here just bought a car with zero down or cash back car financing?
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I m one of those with zero downpayment. yes, what about?Originally posted by Gazelle:I would like to know how of us here just bought a car with zero down or cash back car financing? -
Do you knowOriginally posted by formula1:I m one of those with zero downpayment. yes, what about?
a) How much your car is worth after 2 years,
b) How much you have to pay the bank if you intend to sell you car in 2 years
c) For every $1 of installment you are paying in the 2 years, what percentage of that actually goes into paying interest? -
Hi Gazelle,Originally posted by Gazelle:Do you know
a) How much your car is worth after 2 years,
b) How much you have to pay the bank if you intend to sell you car in 2 years
c) For every $1 of installment you are paying in the 2 years, what percentage of that actually goes into paying interest?
I m not a detail person leh, but 1 thing i know is that the resale value of cars are bad. N 2 yrs later does not seem good either.
As to your ? a b c, I believe it is kind of beyond control after signing the H/P contract. For me now; probably the best option is to "love" my car for as long as possible until situation turn otherwise, and pray that I will not be out of job or better still, find a more rewarding ($) opportunity.
Ohh, by the way do you know about this article that appeared in the newspaper on either 26 or 28 July. http://www.autoclubsingapore.com/modules.php?name=News&file=article&sid=111http://www.autoclubsingapore.com/modules.php?name=News&file=article&sid=111
Any comments? (anyone welcome) TIA -
I think this will only affect you if banks wanna reposses your car and sue you. Banks might not have a case cause their have the loan amount they loan to you is not within the limit set by MAS.Originally posted by formula1:Hi Gazelle,
I m not a detail person leh, but 1 thing i know is that the resale value of cars are bad. N 2 yrs later does not seem good either.
As to your ? a b c, I believe it is kind of beyond control after signing the H/P contract. For me now; probably the best option is to "love" my car for as long as possible until situation turn otherwise, and pray that I will not be out of job or better still, find a more rewarding ($) opportunity.
Ohh, by the way do you know about this article that appeared in the newspaper on either 26 or 28 July. http://www.autoclubsingapore.com/modules.php?name=News&file=article&sid=111http://www.autoclubsingapore.com/modules.php?name=News&file=article&sid=111
Any comments? (anyone welcome) TIA -
That would be the worst senario when someone is unable to keep up with the instalments. But as U know, the banks will mark-up the value of your car and put the excess $ as "cash deposit" which was never did. I realised mine is also like that after my colleage told me about his.Originally posted by Gazelle:I think this will only affect you if banks wanna reposses your car and sue you. Banks might not have a case cause their have the loan amount they loan to you is not within the limit set by MAS.
{ e.g. agent and buyer agreed price 60k. Full loan from bank 60K. H/P contract state total car value at 69k with the 9k as deposit and 60k as load. }
Big org. like banks are playing punk with the system/rules made by MAS.. "openly". What a joke or am I being too naive.
Let's make the best of today as tomorrow is still another day. -
If u cant even afford downpayment...Originally posted by Gazelle:I would like to know how of us here just bought a car with zero down or cash back car financing?
how u going to afford installment?!
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Very true! However, one can argue that he/she is spending future earning. Life-cycle theory?Originally posted by no_speeding:If u cant even afford downpayment...
how u going to afford installment?! -
spending future earning on car in Singapore? I dont think it is a wise decision.Originally posted by mushigen:Very true! However, one can argue that he/she is spending future earning. Life-cycle theory? -
Buying a car in Sgp is never a wise financial decision, unless the car is used as a tool to help you earn more money.
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if possible pay in full
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The best is to have the money in full but take a 100% loan! Strange? Well the logic behind it is simple.
Current 10 year loan interest rate is about 2.45%. Usually most banks will an interest rebate bring down the interest rate to about 2% +/- a little.
If I had the money to pay up for the car, I would use the money and place it in a Australian acc. The current compounded interest rate offered is about 5.4% paid monthly without any minimum sum and minimum period. As world interest rate are poised to increase, so will FD rates.
Based on a 100K loan for instance, monthly interest paid out will be about 170SG (assuming an interest rate of about 2%). If the money was put into a FD of 5.4%(currently offered by citibank AU) you will earn about 450SG per month. This will leave you with a profit of about 280SG per month.
Of course there are risk in doing the above.
1) currency fluctuations. (which can either go up or down)
2) Currency exchange spread. About 1.5 to 2% ( buyin Au currency then later converting it back to SG)
But this is what I would do!
Saabster -
Are you sure about no minimum period for AUD FD? Why is it still called an FD then?Originally posted by saabster:The best is to have the money in full but take a 100% loan! Strange? Well the logic behind it is simple.
Current 10 year loan interest rate is about 2.45%. Usually most banks will an interest rebate bring down the interest rate to about 2% +/- a little.
If I had the money to pay up for the car, I would use the money and place it in a Australian acc. The current compounded interest rate offered is about 5.4% paid monthly without any minimum sum and minimum period. As world interest rate are poised to increase, so will FD rates.
Saabster -
You are sharp! True it is not an FD.
It is called an Online cash manager. Thought FD would be easier for ppl to understand
you can check it out here http://www.citibank.com.au
Also there is ING which is offering an interest of 5.25%
Saabster -
Your intial interest payment will be much higher than $170 per month, cause majority of your monthly loan payment will go into interest rather than reducing your principle amount. (RULE7Originally posted by saabster:Based on a 100K loan for instance, monthly interest paid out will be about 170SG (assuming an interest rate of about 2%). If the money was put into a FD of 5.4%(currently offered by citibank AU) you will earn about 450SG per month. This will leave you with a profit of about 280SG per month.
Saabster
If I have the cash, I would prefer to take a shorter loan period (e.g 3 years) so that you can reduce the effect of Rule78.
Rule78 sucks!!
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Thought Rule 78 is the one that calculates the interest penalty for early redemption of car loan?Originally posted by Gazelle:Your intial interest payment will be much higher than $170 per month, cause majority of your monthly loan payment will go into interest rather than reducing your principle amount. (RULE7
If I have the cash, I would prefer to take a shorter loan period (e.g 3 years) so that you can reduce the effect of Rule78.
Rule78 sucks!!
Think what you are talking about is the difference between flat rate and effective rate. Saabster should have used the effective rate for comparison. I think if one includes the tax on interest income in Australia, the profit could be miniscule... not worth it lah.
kk -
The tax rate is bad but not that bad. Tax is only incurred if more than 6K of interest is paid per year. Which means that you have to only start paying taxes if you have about 110K with them!
That being said, foreigners(like ourselves) will have to pay a 10% tax irregardless of the interest earnt. From what i hear this is a flat rate. But I find it hard to belief though. Probably have to do more research on this.
If you do your maths, you can calculate whether it makes a difference.