A loan is spending your money and having it...you may save till ure old to get a good car..cheeers

Marshalltj: I don't knw whatever u guyz think...dz made fp.....

My contribution: Loan are risky to take depending on where you are getting it from, Our Banks can frustrate your life when you take loan from them cos of their hidden conditions.

My Advice: Safe your humbly earnings and be patient, your dream car will be a reality.

My Thot: If you take a loan to buy car and eventually u bash wit it den u will know the difference between Owned and Loaned

if u don't have money to buy a car,trek and join public transport and continue to pray for promotion.silly question I must say

The risk factor involved in using a Loan to buy a liability is always high and mostly not adviced..


Buying a car on a loan.


What happens when you cant service the loan?!

or

Something bad happens to the car (theft, flood, damage, fire, e.t.c)?!

Nope the loan is better. Especially if you plan on getting another car, with a year.

Think hard about it, real businesses has nothing to do with risk but profit benefit.

The banks is their to bear the brunt. An easy escape if your credit worthy and financially intelligent.

See it this way. Buy car on loan, service the loan, sell car after a yr, top money buy a more expensive car and keep servicing initial loan.

The rich and financially intelligent have been ddoing this for years.

Someone said car theft or accident. .. If your really interested in risks what are the possibilities of you dying in a car crash. But you buckle up.. You reduce risk, you manage risk... You don't avoid it.

Bros as a paramilitary personel level 8 on 120k,who want to go into transportation biz,dose it mean,geting loan 4rm my bank,and buy 2 taxi cars,i can't make it,b/c na 4 biz i wan use am 4.pls ur advice

trueman1: My advice for you is to buy a small car that your savings is adequate for, one thing I have learn't is that maintaining a car you have not fully paid for can be so stressful and disgracing especially when it is your first car. Pls take this one...To maintain a car, you need to be little bit comfortable...don't borrow to buy a depreciating asset.

Go get ur sef into co-opera-thieves because u wanna ride a car, i pray u dnt regret it sha

CHIMSKY:
There is this thing called cashflow.Ideally its better to buy something,take possession and pay over time.You need to pay other bills.Sadly,in our country,the banks only offer a basic product.:the savings account.They dnt have financial creativity.So our financia services industry is dead.

lets learn to wait till we can afford certain things before we own them. Where is the road in lagos to enjoy the car self. Even on weekends you cant freely move around.what if the car get stolen ,then u continue to pay for what u don't see.if the asset is enduring like home I will certainly consider a loan.

Its simple economics.

Here in the usa, manufacturers offer 0% interest rate so it makes sense to use use their money for finance and keep keep yours in the bank earning interest.

Vehicles as well as other depreciating assets should not be financed if the total cost including interest paid is more than the value of the asset.

Dominionng: Reading through some comments here, I must admit.. I feel like weeping for the future of this country. You guys were taught how to work for the government and the big multinationals but not how to be financially intelligent.

Now, forget what u were taught in school! In the real world, the simple meaning of asset is anything that brings in money while liability is anything that takes money from u. The car you bought for luxury is a liability.

Contrary to some comments as well, taking a loan is not a bad thing. It only depends on what u do with the cash. When u take a loan to aquire a liability, it's called Borrowing whl a loan used to aquire an asset is called leverage. You see, the rich don't borrow. They leverage!

Some dude even said something abt saving to aquire a liability, Haba! Get a job! Create multiple sources of income! Learn to cut ur coat according to ur coat. Driving a car early doesn't make you fulfilled. Life is a race, there is room for overtaking. Life isn't fair. Bleach yours with being financially intelligent.

Well he never mentioned if the car was for luxury. He could be packaging himself for some big deals for all we know.

If I was an employee, I would never need to buy a car, whether from a loan or cash at hand. But for someone looking to start a business or already doing a business, upgrading your lifestyle/social life could mean the difference between clinching that deal or loosing it to a competitor. This is Nigeria where successful people love to do business with successful people or perceived successful people.

Now to the question, if your business requires you to show a bit of success, then by all means get a loan and get yourself that nice car. It'll pay for itself over and over. But if you're an employee, save your money until your employer decides to get you an official car or whenever you can afford one yourself. Whichever comes first.

where I dey:

Bank loan for cars:
-new comer 13-14%
- established credit rating 7%
- some bigger boys can still get special consideration at 4%

Direct loan from car dealers:
- Acura 2.9% max 60 months
- Kia 0.0% upto 84 months
- Ford 0.0% unto 60 months
- infiniti 2.9% 60 months
- Toyata 0.9% 60 months
-etc

some of these percentages are negotiable based on duration, amount of down payment, trade-in and which car you take etc...

N/B: You don't OWN the car until full payment is made.
If you default then the car can be repossessed!

Generally, with 0% to 2.99% I will rather take the car Loan!
Note there is also A LEASE arrangement where you just pay more and return the car say for example every year and pick a new one!
You know shaa that they're NOT worried about armer robbers etc.

it is your responsibility to insure your car and police will arrest you if you don't!

kodewrita: Subject above refers.

Which is more financially intelligent of the two? which would you rather do and under what circumstances?

It seems many contributors have no clue about finance.

It depends on the financial arrangement. You have to calculate all cash flows for both options from purchase to the point of resale or conclusion of repayment of the loan.

Option 1: You have to calculate all the future repayments of the loan using a discounted cash flow approach to acknowledge the time value of money and come up with a Net Present Value.

Option 2: You have to calculate the Net Present Value of buying it outright and take into consideration the opportunity cost of using your money to generate other revenues/income stream by paying bit by bit.

The one with the most favourable Net Present Value of cash flow to you is the best option.

To cut it short, the value calculations is too complex for most people so they will go with what makes them happy the most.

Abeg, all those Mr Knowitall, please stop insulting us if we differ in opinion to you. If you are some Chief Economist in your village, its good for you.

But all we said here is through experience and also different financial systems surrounding us in respective locations.

So please, respect everyones opinion and experience and tell us about your experience and stop insulting trying to prove you are financially astute

[size=13pt]

ARE YOU IN LAGOS, PORT-HARCOURT OR ABUJA??
NOW YOU CAN BUY A CAR AND PAY IN MONTHLY INSTALLMENTS

Read the process to obtain this car loan in the following link below[/size]
http://www.viperautos.com/index.php?topic=543.0

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gtrust: where I dey:

Bank loan for cars:
-new comer 13-14%
- established credit rating 7%
- some bigger boys can still get special consideration at 4%

Direct loan from car dealers:
- Acura 2.9% max 60 months
- Kia 0.0% upto 84 months
- Ford 0.0% unto 60 months
- infiniti 2.9% 60 months
- Toyata 0.9% 60 months
-etc

some of these percentages are negotiable based on duration, amount of down payment, trade-in and which car you take etc...

N/B: You don't OWN the car until full payment is made.
If you default then the car can be repossessed!

Generally, with 0% to 2.99% I will rather take the car Loan!
Note there is also A LEASE arrangement where you just pay more and return the car say for example every year and pick a new one!
You know shaa that they're NOT worried about armer robbers etc.

it is your responsibility to insure your car and police will arrest you if you don't!

Now you are talking. In Nigeria this is the cost of the loan

Commitment fee - 1% of the total loan
Management fee -2% payable annually
Insurance cost - 10% of insurable value
Interest per annum - 18% to 23% compounding
Tenor. - 2 to 3 years

Is loan financing really an option in nigeria?

packman: [size=15pt]FUNNY QUESTION.......

OP NO GO KILL ME..........

WHICH NIGERIAN BANK DO YOU THINK WOULD LOAN YOU MONEY TO BUY CAR.....

OGA YOU DEY NIGERIA.......OOOOOOO

HAHAHAAHHA.....[/size] [size=40pt]YIMU [/size]

Try Union Bank Plc, they have Union Plus Auto Loan basically for salary earners.

klas:

Now you are talking. In Nigeria this is the cost of the loan

Commitment fee - 1% of the total loan
Management fee -2% payable annually
Insurance cost - 10% of insurable value
Interest per annum - 18% to 23% compounding
Tenor. - 2 to 3 years

Is loan financing really an option in nigeria?

This make NO sense!
I will ONLY take this option if I don't have to repay.

Question: what happens if you don't repay
what happens if the car is stolen from you
Overseas when your car is stolen, no wahala. Insurance company will replace sharp sharp.
Infact, it is a good thing for your car to be stolen overseas. You can even take the money, add change buy better car.
While your file is being processed, if you have a comprehensive insurance, you will be given a replacement car!

^^ That is what the insurance component is all about. It is for comprehensive insurance payable annually. The interest of the bank will be noted in the policy as the loss-payee. So the claim payment goes to the bank first not the borrower.

chineloSA:
Abeg, all those Mr Knowitall, please stop insulting us if we differ in opinion to you. If you are some Chief Economist in your village, its good for you.

But all we said here is through experience and also different financial systems surrounding us in respective locations.

So please, respect everyones opinion and experience and tell us about your experience and stop insulting trying to prove you are financially astute

Unfortunately for you, financing calculations is independent of "financial systems surrounding you", it is universally applicable. Sticking to such illiterate positions instead of learning will just cost you money.

Ignorance can be very expensive.

Yours Sincerely,

Chief Economist (Sagamu Local Government area)

Sagamite:

Unfortunately for you, financing calculations is independent of "financial systems surrounding you", it is universally applicable. Sticking to such illiterate positions instead of learning will just cost you money.

Ignorance can be very expensive.

Yours Sincerely,

Chief Economist (Sagamu Local Government area)

Yabaleft wowo

See you are still rude and arrogant. If you know as you claim " Mr Chief Economist - SLGA ,educate us.

I wont stoop to your level. I am sure while you were studying your Kitchen Economics there was a module called Rude - RUDE300, you are so good in being rude more than anything.

chineloSA:

Yabaleft wowo

See you are still rude and arrogant. If you know as you claim " Mr Chief Economist - SLGA ,educate us.

I wont stoop to your level. I am sure while you were studying your Kitchen Economics there was a module called Rude - RUDE300, you are so good in being rude more than anything.

Yes, when I was being educated, I had tutorials on how to deal with ignorants who would conveniently reject facts, logic and sensibility. Ignorants that would insist on sticking with their ignorance all because they are intimidated by the technicalities of expertise.

Instead of these ignorants making inquisitive enquiries and learning to sharpen their mind, they choose to attack obvious sense and state knowledge and academic methodology is worthless and their Okrika market education is what is the best.

Yes, my education was high quality and equipped me in addressing illiterate ignorants.

i once bought a car for 500k b-cos i felt that was what i could afford and it would be easy to maintain. Sadly, ended up spending so much to maintain it and eventually spent a lot more than the actual value of the car and disposed of it at a loss. So now, i borrowed money from family and friends and bought a reliable car for 1 million, nigerian used. i pay for it in installments.
If i had been waiting to save up money before buying outright, it would probably take longer and i would have spent the money on all sorts of stuff.
I would have denied myself the convenience i'm enjoying now. b-cos its still sort of an indirect saving/ long term payment plan.

and because i borrowed from family, i don't have to pay interest, although one of my lenders is collecting some sort of interest.

So, i think people kinda jump into these stuff without planning. i lost a lot of money initially and i don't earn that much, cos i thought i was being financially wise buying a cheap car i could pay for out-rightly.

My advice, look at your steady income and work out a sort of payment plan convenient for you if you want to take a loan, but make sure the car won't kill you ie, dont buy a car that will put ur mechanic on speed dial!!!/ turn your mechanic to ur paddy or turn your weekends to motor-service days...been there, done that, not cool.

Sagamite:

Yes, when I was being educated, I had tutorials on how to deal with ignorants who would conveniently reject facts, logic and sensibility. Ignorants that would insist on sticking with their ignorance all because they are intimidated by the technicalities of expertise.

Instead of these ignorants making inquisitive enquires and learning to sharpen their mind, they choose to attack obvious sense and state knowledge and academic methodology is worthless and their Okrika market education is what is is best.

Yes, my education was high quality and equipped me in addressing illiterate ignorants.

See this airhead called Sagamite. Did I reject to learn?? All I said is you should stop insulting people because we have different experiences and different financial institution from different countries. I then said please state your point without insults

You are an ignorant airhead that thinks things work similar in different countries. I dont even have the energy to engage with you. You have shown some hooliganism traits. My mama told me not to engage with your kind.

Go sleep jaaare

chineloSA:

See this airhead called Sagamite. Did I reject to learn?? All I said is you should stop insulting people because we have different experiences and different financial institution from different countries. I then said please state your point without insults

You are an ignorant airhead that thinks things work similar in different countries. I dont even have the energy to engage with you. You have shown some hooliganism traits. My mama told me not to engage with your kind.

Go sleep jaaare

You are a person!

You need it knocked into your empty head that financial methodology is independent of environment, financial institutions, countries, debtors, cement used in building the bank, malaria that affects the people, asaro the banker ate the previous night etc.

Just like the chemical table is independent of environment, chemical firms, countries, patients, cement used in building the factory, malaria that affects the people, asaro the chemist ate the previous night etc.

Blocking such facts from entering your thick skull and cemented oblongata is an example of refusing to learn. Tell mummy, you need to go back to school.

There is just one rule for your situation.

You should not attempt to buy a car if you cannot pay cash! Or you are not mature for a car until you can buy it outright with cash.

Nigerians and their interesting ability to input/imagine more facts than specified. Smh.

Thanks for the many interesting responses. Liked linearity's posts and Sagamite's DCF idea (Total Econs nerd and stop fighting ChineloSA on my thread. Enter her PM stat!!!).

The keyword in the question above is: Financial Intelligence.

Clearly most of you believe loans are evil under All circumstances.

And please leave the whole BS about maturity and car ownership aside ( absolutely no link but guessing thats a sop to your own egos), I drive a pretty good car already.

Its just sensible to ensure you are well advised before taking major decisions in life (Prov 11:14) hence this largely academic question.

I created the question just to gauge reactions and to see if people would suggest links and resources I could check to further confirm my personal bias. (One so far).

Still open to tips and your ideas.

Regards

With a loan you will pay interest which could double the cost. So try and negotiate it to under 10 %,
On the other hand this a good way to build your credit with the banking system!

A lesson in the form of financing to get your car was given to members of the force some years ( 2004-2006) back in the issue of various brands of Peugeot cars depending on their ranks ( 406 to colonels and above, 307 to majors and lieutenant colonels and 206 to captains lieutenants). They were made to pay by deducting a regular amount from their salaries over a period of 60 months. The amount deducted was not more than guess 32 % of their total monthly gross pay. All those who benefitted from the pilot scheme had finished their payments and life goes on. Infact some had already gooten used to that deduction and planned their lives on the remaining that after the end of loan ( finance) it was like they just had a new salary increase.
So nothing is wrong in financing as long as deductions will not be more than 30% of net take home. Better to have a new car with less expenses in 3-5 years than buy tokunbo and fixing and repairing at least 5 timesin a year. And a bank have some offer on the table for such now and I believe its a good deal, Find out which if interested

Look for an investment that can pay you more than the bank rate with regular inflows and use part of the inflows to make the monthly payment to the bank.
At the end of the tenure of the loan, you will still be having your investment and your car. The rich use their cash to make more money and accumulate their asset with other peoples money. Don't be afraid of taking loan but do your due diligent before taking any form of loan.

A vehicle is a liabilliability and the loan is a liability so do not buy a liability wit a liability.... be wise.

treatise:
Try Union Bank Plc, they have Union Plus Auto Loan basically for salary earners.

For Tokunbo?