10 years loan.
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If i took a 10 year loan for my current car,how long must i drive b4 i can sell my car without losing any money?
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Heard from some SE that is around 5 yrs to break even
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10 years loan means you car will remain a negative equity. 5 years break even? Think harder... many people do not do their calculations before embarking on such loan. It may take 8-9 years to break even. That means if u sell your car before that, u have to top up in cash... reality bites for those who took balloon or 10 years loan.Originally posted by Jerry2308:If i took a 10 year loan for my current car,how long must i drive b4 i can sell my car without losing any money?
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That's right , $1 or $0 downpayment to be stretched for 10yrs loan is a gimmick. Therefore, you may have to buy a car that you really like and intend to keep till scrap it. You really need to consider all the factors and facts before you jump into it.Originally posted by LCL:10 years loan means you car will remain a negative equity. 5 years break even? Think harder... many people do not do their calculations before embarking on such loan. It may take 8-9 years to break even. That means if u sell your car before that, u have to top up in cash... reality bites for those who took balloon or 10 years loan.
The economy may be peaking up but for sure we won't know what is like in the future.
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I think you already start to lose money from the time you bought the car.Originally posted by Jerry2308:If i took a 10 year loan for my current car,how long must i drive b4 i can sell my car without losing any money?
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If SEs could be trusted fully, pigs could rollerblade.Originally posted by D16Z6:Heard from some SE that is around 5 yrs to break even
There are many -ve points of getting 10-yr loan.
1) Pay lots of interest (motherhood statement)
2) Your car is in -ve equity situation for a long time - actual time depends on car market prices which is not easily predicted. The lowest it can get is its scrap value + COE rebate at that moment. In fact, you still have to pay the dealer a percentage of the value for their hard work of scrapping your car.
3) You have buy comprehensive insurance throughout the loan tenure.
4) If you crash your car, the ins co. may decide it is too costly to repair your car. It can scrap your car and you'll have to top up money after losing your car!
5) After say 5 years, you get sianz of the car. You cannot sell it 'cos you'll have to top up in order to clear your outstanding loan balance. You end up having to continue paying the instalments for something you don't like. Not a nice experience. -
It depends on how much downpayment you are paying. You can pay 30% upfront and loan for 10 years in which you might breakeven at the 5th year?Originally posted by Jerry2308:If i took a 10 year loan for my current car,how long must i drive b4 i can sell my car without losing any money?
My colleague loan $47K for a $67K new Sunny 1.6Ex for a period of 10 years and his monthly is less than $500 per month. It all depends on how you want to manage your money. -
Cars ' prices are dropping but its still very exp to own a car in Singapore.
A 10 yrs plan is definitely nt worth it as the interest is too high and u will definitely take more than 5 yrs to balance up....
Take for example the cheapest car in town > Hyundai Accent
Est. Price ard : $56,000
10 yrs interest rate: 2.3%/ annum
Actual total price u paying: 56k + 23% = $68,880
U R PAYING EXTRA $12,880 for the INTEREST !!!!!
the abv price is without insurance, road tax bla bla bla...
somemore with respect to the every year depreciation of korean cars, u r actually losing a lot of money than making a wise decision by signing the $0 downpayment....
My advice: Save up and invest more on the downpayment. -
how do you calculate rule 78 and break even ?
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Break even?
Cars are a major liabililty. You'll never break even. Especially here with 200% tax + COE.
Ever thought of this? -
Say you make $5k a month, that's $60K a year. Buying a $90K car would mean every single cent you toil and slave away to make over the next 18 months goes to pay for that car. This excludes, finance interests, road tax, insurance, parking, petrol, maintenance, misc expenses... Add that all up...
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Agree there is no such thing as break-even. Since when does a private car generate revenue? It's a liability from the start.
First do a projected cashflow calculation. Take into account all your financial objectives (savings, investments, retirement, emergency etc). Once you are comfortable with setting aside an amount to be burned every month, use that amount to shop for a car that you like. Interest payments and loan tenure are subjective. Your real decision is setting your financial objectives, which are the really important things. Once they are set, you can indulge with whatever spare cash there is.
Don't mess up your life over a car. It doesn't really belong to you. It's a 10-year renewable lease at best. -
I think its not the the quantum of the loan but the % of the loan cf w the purchase price.