wazua Fri, Nov 15, 2024
Welcome Guest Search | Active Topics | Log In | Register

4 Pages«<234
Car loan - to take or not?
Options
Previous Topic · Next Topic
chemirocha
#61 Posted : Wednesday, March 09, 2016 7:30:03 AM
Rank: Member


Joined: 1/30/2016
Posts: 332
Location: Rift Valley
Mike Ock wrote:


If the loan was a reasonable, single digit percentage, then yes, your reasoning would hold up. But if the loan is the typical Kenyan double digit shark loan, then no thanks.


It should be criminal to say something this ignorant on a forum that concerns irself with investing.

Even assuming the most expensive loan on the market, that money burning a hole in your pocket can be put to better use elsewhere.
Back to top
 Report Abusive | Report SPAM
bird_man
#62 Posted : Wednesday, March 09, 2016 8:02:18 AM
Rank: Veteran


Joined: 11/2/2006
Posts: 1,206
Location: Nairobi
Option 1:
-Save the 1M and buy the car on cash basis.You forgo any returns on the 1M.

Option 2:
-Take 1M loan from bank for 4yrs @24%pa.
-Total interest after 4yrs is 564K ie 11.7K/month
-Monthly loan repayment (includes interest component) is 32.6K
-Invest the 1M on 4Yr TBill at say 13%pa = 10.8K per month return
-Thus net interest expense is 11.7K-10.8K=900sh

Option 2 makes mathematical sense right? Emotionally though you will be very stressed if you don't have a high income.Paying 32K plus rent plus parking plus fuel plus maintenance and spares plus insurance for a depreciating jalopy is no fun.The Option 1 guy is at more peace. You decide.
Formally employed people often live their employers' dream & forget about their own.
Back to top
 Report Abusive | Report SPAM
Swenani
#63 Posted : Wednesday, March 09, 2016 10:10:27 AM
Rank: User


Joined: 8/15/2013
Posts: 13,236
Location: Vacuum
Cornelius Vanderbilt wrote:
how exactly in your right mind do you buy a car through a loan that you are paying interest.unless is a vintage car that will appreciate in value over time it doesnot make financial sense to buy a car through a bank loan


Even a 2016 Prado VX will be a vintage car come 3016!
If Obiero did it, Who Am I?
Back to top
WWW
 Report Abusive | Report SPAM
bird_man
#64 Posted : Wednesday, March 09, 2016 11:00:32 AM
Rank: Veteran


Joined: 11/2/2006
Posts: 1,206
Location: Nairobi
bird_man wrote:
Option 1:
-Save the 1M and buy the car on cash basis.You forgo any returns on the 1M.

Option 2:
-Take 1M loan from bank for 4yrs @24%pa.
-Total interest after 4yrs is 564K ie 11.7K/month
-Monthly loan repayment (includes interest component) is 32.6K
-Invest the 1M on 4Yr TBill at say 13%pa = 10.8K per month return
-Thus net interest expense is 11.7K-10.8K=900sh

Option 2 makes mathematical sense right? Emotionally though you will be very stressed if you don't have a high income.Paying 32K plus rent plus parking plus fuel plus maintenance and spares plus insurance for a depreciating jalopy is no fun.The Option 1 guy is at more peace. You decide.


Problem actually is that most people I know never have the 1M in the first place.
Formally employed people often live their employers' dream & forget about their own.
Back to top
 Report Abusive | Report SPAM
Users browsing this topic
Guest (2)
4 Pages«<234
Forum Jump  
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.

Wazua Market Theme
Powered by YAF | YAF © 2003-2009, Yet Another Forum.NET
Copyright © 2024 Wazua.co.ke. All Rights Reserved.