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Loan Tenure


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#11
scenic

Posted 10 February 2011 - 12:56 PM

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QUOTE (flee @ Feb 10 2011, 12:47 PM) <{POST_SNAPBACK}>
No real B&W answer to this question. The person who finished paying his car loan after 5 years will have spare cash the next four years (assuming he is keeping his ride) which he can also use for investment. So its really up to the individual to decide. Each person has his own financial and risk profile. So they should decide on what is their priority and then make the decision that is correct for them.


From point of view of Accountants, they say buy with cash only. Cheers.
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#12
gregy

Posted 10 February 2011 - 01:51 PM

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QUOTE (scenic @ Feb 10 2011, 11:49 AM) <{POST_SNAPBACK}>
If U really want the facelift 308 then, you don't have to cancel your order.


Actually what I meant was, if the 308 FL is coming soon, and I went ahead and took the current model, sure won't have that nice brand new feeling very soon lol. Not to mention taking a hit on residuals. Same reason why I decided against the Ford Focus TDCI.

Also, it would probably take Nasim quite a while to launch the FL here, seeing how long it took the 6-speeder to arrive on our shores. I don't want to wait with uncertainty.

I'll sure miss the moonroof and beautiful interior, but I won't miss the pre-FL looks and minor niggles everywhere else. After more than 2 yrs since launch and Nasim have yet to solve the leaky cam cover, depollution sensor etc. And also that RM4,000 windscreen that is prone to cracking lol...

I know that in a way I'll be making a compromise and be staring at hard plastics in the Forte everyday to remind me LOL but at least I don't have to be at the mercy of the Pug SCs.

Sane reasons? Whaddya think? smile.gif
There are no lousy cars. Only better cars.

#13
gregy

Posted 10 February 2011 - 01:53 PM

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QUOTE (scenic @ Feb 10 2011, 12:56 PM) <{POST_SNAPBACK}>
From point of view of Accountants, they say buy with cash only. Cheers.


LOL. If only more of us had so much cash to lock away in a depreciating liability, and if only cars were more affordable. Sigh.
There are no lousy cars. Only better cars.

#14
gregy

Posted 10 February 2011 - 02:02 PM

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QUOTE (flee @ Feb 10 2011, 12:47 PM) <{POST_SNAPBACK}>
No real B&W answer to this question. The person who finished paying his car loan after 5 years will have spare cash the next four years (assuming he is keeping his ride) which he can also use for investment. So its really up to the individual to decide. Each person has his own financial and risk profile. So they should decide on what is their priority and then make the decision that is correct for them.


Agree, that's why if a person is disciplined enough and knows how to make money work for him, then he might be better off taking a longer term and investing the rest. There are cases where some ppl really spend 1/3 of their salary every month just so they can pay off their car loans fast; in case of emergencies he will be stuck.

I remember reading a thread somewhere in AW that a forumer recommended taking the longest loan duration, so that when he can afford it, make two payments per month. When an emergency happens, he can still afford one month repayment, or worse case, take a few months "repayment holiday" since he's way ahead in his repayment schedule due to paying two months every month.

Just another way of looking at things smile.gif
There are no lousy cars. Only better cars.

#15
ary999

Posted 10 February 2011 - 02:04 PM

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QUOTE (gregy @ Feb 10 2011, 01:51 PM) <{POST_SNAPBACK}>
Actually what I meant was, if the 308 FL is coming soon, and I went ahead and took the current model, sure won't have that nice brand new feeling very soon lol. Not to mention taking a hit on residuals. Same reason why I decided against the Ford Focus TDCI.

Also, it would probably take Nasim quite a while to launch the FL here, seeing how long it took the 6-speeder to arrive on our shores. I don't want to wait with uncertainty.

I'll sure miss the moonroof and beautiful interior, but I won't miss the pre-FL looks and minor niggles everywhere else. After more than 2 yrs since launch and Nasim have yet to solve the leaky cam cover, depollution sensor etc. And also that RM4,000 windscreen that is prone to cracking lol...

I know that in a way I'll be making a compromise and be staring at hard plastics in the Forte everyday to remind me LOL but at least I don't have to be at the mercy of the Pug SCs.

Sane reasons? Whaddya think? smile.gif



well most of 308 owners nvr regret of buying the lion even with all the problems...

that aside... i would wait for the forte koup if i knew it would be sold in msia
simply bcoz i love 2doors cars

#16
enduser

Posted 10 February 2011 - 09:06 PM

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QUOTE (gregy @ Feb 10 2011, 01:51 PM) <{POST_SNAPBACK}>
....I know that in a way I'll be making a compromise and be staring at hard plastics in the Forte everyday to remind me LOL but at least I don't have to be at the mercy of the Pug SCs.

Sane reasons? Whaddya think? smile.gif

nasim = naza = brother smile_big.gif smile_big.gif

#17
scenic

Posted 12 February 2011 - 04:52 PM

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There's a guy here who bought his Corolla 101 with cash and another one person with his new W212 E Class. Respect them all. Cheers. trink39.gif
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#18
byebye2u

Posted 12 February 2011 - 05:37 PM

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QUOTE (gregy @ Feb 10 2011, 02:02 PM) <{POST_SNAPBACK}>
Agree, that's why if a person is disciplined enough and knows how to make money work for him, then he might be better off taking a longer term and investing the rest. There are cases where some ppl really spend 1/3 of their salary every month just so they can pay off their car loans fast; in case of emergencies he will be stuck.

I remember reading a thread somewhere in AW that a forumer recommended taking the longest loan duration, so that when he can afford it, make two payments per month. When an emergency happens, he can still afford one month repayment, or worse case, take a few months "repayment holiday" since he's way ahead in his repayment schedule due to paying two months every month.

Just another way of looking at things smile.gif


Both A or B way has pro and con too. but if plan to keep more than 5 years then longer tenure would be more advantage. in fact i would suggest to my customer for longer tenure.(12 years if possible hihihi).assume if both A and B has same income.

inflation at 4% yearly make money smaller, rm600 monthly extra can be use to generate other income by buying small property, investing...money make money. cars always depreciate, no point of paying extra. some property in good area double-up in 5 years.

rm600 monthly can secure rm100k ASB loan(20years tenure), you can surender after 5 years and earn over 80k on compounding interest at 8.5% per annum.

the same rm600 on monthy at 7.0% in ASW or others can earn almost 50k too in 5 years

plus majority of malaysian are paying cars until after retire too, never complete payment change car already, so why paying more for the same purpose..


my 1/2 cent..hihi smile_clown.gif



#19
ymfoo

Posted 17 June 2011 - 08:32 AM

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QUOTE (gregy @ Feb 1 2011, 01:26 PM) <{POST_SNAPBACK}>
Hi guys,

Over the years or can I say throughout the entire history of AW I'm sure you've come across many ppl who advocate taking short loans and why anything over a 5 yr tenure means you really can't afford the car. Well, lately I did some rough calculations and I've found that there really isn't a good enough reason to tie your money down just to shorten your "sentence" LOL... Here's why:

Assuming:
Car's original price = RM97,800 (Forte 2.0 FL)
Loan taken = RM86,000 @ 2.7% PA
Car's price after 5 yrs = RM50,000
Owner changes car after 5 yrs

Borrower A takes 5 yrs = RM86,000 x 1.135 = RM97,610, or RM1,626.80 / month

Borrower B takes 9 yrs = RM86,000 x 1.243 = RM106,898 or RM989.80 / month


After 5 yrs, selling the car at RM50,000:
Borrower A gets RM50,000
Borrower B gets (RM50,000 less RM43,500* settlement to bank) = RM6,500 (Wow! Big difference eh?)
*The amount of RM43,500 was taken from AW's loan settlement calculator, rounded up.


In reality, Borrower A paid an extra of RM637.00 per month vs Borrower B, amounting to:
(RM637 x 60) = RM38,220

So, his actual nett gain is:
(RM50,000 less RM38,220) = RM11,780

Hence, Borrower A's tenure advantage over Borrower B is only:
(RM11,780 less RM6,500) = RM5,280

So, in order to realize a nett gain of RM5,280 after 5 years, Borrower A has to fork out an additional RM637 per month. In other words, when considering a new car, you must ask yourself, do you have the willpower to set aside RM600+ a month in your bank while enjoying a lower repayment thus less stress, or would you prefer to take a short tenure and force yourself to pay that extra money to the bank or they will tarik your car LOL...

IMO people with good financial discipline should take a long tenure and manage their funds themselves.

Happy CNY and Happy Holidays!


I think you logic is flawed.

Based on your calculation, RM5280 divide by 60 months, you save RM88/month. Now you pay extra RM637/month, but you save RM88/month which works out to be about 14% gain. In investment, anything above 8% is high return, so a return of 14% is very good indeed.

So it still pays to pay in shorter term. The figure never lies......





Cars, Oh cars......