Paying off car. Advice needed

[pimpassdaddy]

That's not an easy question. There are tax implications etc to be considered. How is the vehicle owned? Privately or through a company? Instalments are tax deductible in the latter.

Do you have other debts? Are their interest rate higher than your vehicles?

There's a lot of permutations to answer your question correctly. The long and short of it though, rather continue with instalments and take that money and use it elsewhere? Is your house paid off? It would be foolish to dump that money into your car if you still have a bond open. Or invest that amount into a fund that you can quickly turn to cash if needed.

Dumping R300k plus to cars, means in a years time, that amount is R220k - R250k at least because of depreciation. In a good fund, could be R320k - R350k possibly.

Rather sell the BMW privately, and if there's a shortfall, pay it in. Won't be "much".

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For me its ultimately about how much you saving.

With an early settlement you going to score hugely on interest. I would go with this route, and still put the money aside I would have spend on the installments and save it in an account where I would gain the most interest.
So in essence you save a lot in interest + then let the very money you using now gain you savings in interest.

Its a win in my book.

Also a relevant point.

 

[444YYY]

It will be based on the finance interest rate...

How much do you save in interest by paying off the car now?

Can you invest it somewhere else, with a better return? Currently, the equity market is falling, so you will most like loose in equity investments... (my opinion)

See how much interest you saving and decide the way forward...

 

[individj]

as you said..sell the 35i. keep the other car. buy something cash & you have +- R180 000 to invest...you won't regret that decision in 10 years time mate

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I've got 12 months on my 330i individual & it has 170k on the clock..just going to park it now & do little things on it & pay it off. going to sell my other 330i individual & Range Rover that i owe nothing on..going to drive around in my datsun & going to get a bike (i travel 14km's both ways per day) & wifes car on weekends.

 

[m0lt3n]

you must look at the interest rates.
if you pay it off its a lot of interest saved whereafter you start investing somewhere else again. if you invest the money elsewhere it has to get more interest positiblve than what you are currently paying.
if you are willing to drive a new 330d as a daily why not just sell the Honda and make the 335i the daily?
you are financially strong enough to foot a random r20k repair bill while saving a lot and it seems not worried that you must have two vehicles.

also selling now you lose the retail/trade difference and buying another you already lost that difference as well....and as its BMW its more than a R100k lost which is a lot more than possible 335i maintenance.

 

[tyu333]

Keep the 335i and use it daily. Get rid of the Honda. The installment, insurance & tracker will go towards petrol and maintanance on the 335i.
With the R300k pay off all the small debts you have and put the rest in your bond.
Don't extend MP, and keep paying installments on the 335i. When you finally get tired of the 335i or some big ticket item fails then you can trade it in.
While the car is fine get as much use as you possibly can out of it.

Sent from my SM-G920F using Tapatalk

 

[MaX]

What is the reason for doing this? Only because you are scared of maintenance cost on the 335? Do you want to downscale? Do you need to downscale?

What is the reason for not doing this? Only because you are scared of the monthly installment? Or affordability?

 

[Waseem 333i]

If the car breaks dont take it to BMW to get repaired. There are plenty other good people who can repair it.

 

[335i MTX]

Thank you everybody for taking the time to respond. I'm actually leaning towards selling the 335i. Once sold, I'll add that instalment to the Honda instalment and pay that off quicker. I just want to be debt free as soon as possible. I bought the Honda by deciding to park off the BMW Monday to Friday. I basically use the daily fuel spend of the 335i to pay the Honda instalment, fuel and add about 300 for insurance. Since buying the Honda, I only use a tank a month on the BMW. But now I think I just don't want that monthly pressure of instalments and on top of that to be saddled with repair costs. Better I cut my losses now and add to any shortfall when car gets sold. Any takers?

 

[MikeR]

:coolShake: - bottom line cars are not an investment no matter what anyone tell you.
speak to your banker for the best advice to invest in these bad times.

 

[MaX]

But now I think I just don't want that monthly pressure of instalments and on top of that to be saddled with repair costs. Better I cut my losses now and add to any shortfall when car gets sold. Any takers?

See, its as easy as understanding what you want before making a decision. Had you said the above in the initial post you wouldve gotten completely different responses. We are facing tough economic times and its going to get worse before it gets better. All of the best with selling the 335.:coolShake: