New car

If you borrowed on your mortgage, would the loan be over the full term of the mortgage?

I think so! I think the OH worked it out that if we borrowed £5k over 25 years we would only be paying about £20 a month extra on our mortgage whereas if we got finance it would probably only be over 5 years max. therefor we would be paying an extra £100 a month. Putting it like that seems like we should go for adding on to our mortgage but I wasn't sure if there would be any hidden charges and if we would have to pay more interest in the long run....

Definitely the finance option, you will end up paying back an absolutely horrendous amount of money as you will effectively be paying it over 25 years with 25 years worth of interest.

The finance option - the interest you would end up paying would outweigh the higher monthly payment now IMO.

We will be buying a new car next year, I have my eye on a nissan juke!

I will be getting one of these soon if my plan works out. Cant wait, they are immense!

i like these!

I think you can state this as fact!

The only reason a mortgage works as a viable financial option is because at the end of your payment period, you end up owning something that is worth more (housing market fluctuations aside) than the total you have paid for it in capital + interest. As this would not apply to your car, it's not a viable option.

Definitely don't take the car on the mortgage then. You'll still be paying for something in 25 years time that you probably won't have owned for 20! And what will you do for your next car loan after this one?

Nope - definitely finance.

A for you all - If I purchase a brand new car on finance, how do I own it at end? Im not going to have a spare £5000 laying around and I dont want to be constantly paying finance.

Im hoping folks lend us the £ and we pay them back in monthly installments!

Depends on the finance deal. Some take a deposit and the balance is spread out over say 4 years. You own the car at the beginning but you have a loan to repay. Or you effectively lease the car for a monthly fee with no deposit and after the fixed term, usually 3 years, you can either pay a lump sum to keep the car or trade it in for another.

Could you not look into getting a personal loan instead of the finance? We were all set up to get a financed car by cancelled at the last minute as the interest was extortionate. We got a much better deal by getting a bank loan and buying a car privately.

I was going to suggest this too. I traded in my old car but got a Sainsburys bank loan to bridge the rest of the balance instead because it was much cheaper than Volkswagen finance. Also got £50 Sainsburys vouchers which was a nice bonus!

Finance all the way. never buy a car new and unless uoure looking for a cheap runaround its the only way to go. lease for 3 years then trade in. you can get amazing finance deals on cars.

I would borrow on the mortgage and pay the £20 extra per month but at the same time put the remaining £80 per month you save into a separate savings account and then when I have saved up enough, make a mortgage repayment. But only if you have no penalties for early repayment of your mortgage, in full or part.

This way you benefit from the cheap interest rate of your mortgage, which is the cheapest loan you'll ever get.

But it will obviously only work if you have the discipine to save the difference.