Hi,

In our thread about how to get a car loan, many people said car loans make no sense in Nigeria.

ifyalways: A car is the last thing I would take a loan for!As far as Ifeoma is concerned,a car remains a liability(be it for biz purporse or for comfort) and as such can only be purchased with "cash".

fm7070: What about interest rate?
Car is a liability. not an asset.
That is where most Nigerians miss it and loom in poverty all their lives

Ijogz K: Car loan ke How wuld som1 use his own hand and money to buy liability Olorun Majeeeeeeee!!!
When u can get loan to buy land or house. Or start up a business or execute a contract. You kon carry money go buy Car,

catso: A CAR LOAN, !
Do not try to receive loan on something that is not bringing/generating income to you.
Car loan from nigeria bank?
Have you ever wonder what the interest pay will be plus all the hidden charges?
Please think twice!

chuckdee4: A car is the wrong thing to get on loan, the moment you buy a new car it starts loosing value, so why take a loan for something that will continually drop in value. I am all for the improvement of people's lifestyle but not at such an expensive price

fm7070: Have you have considered the future of the people you're advising? If they lose their job today, what happens to them and their family? and even the liability (car) they've bought. They ended up selling it so cheap to service the debt. Or do you think banks will sympathise with you if you lose your job?

However, I am not condemning buying a car or getting a loan to buy a car, but what am saying is that: Build your asset first before getting liabilities.
In America, many people will die in debt,  even their children will inherit their debt after working all days of their life. They want to live beyond their income just because of credit monster made available to them.

I will recommend this book to everyone:  Rich Dad, Poor Dad. Read it and become rich from the Inside.

But the author wrote a new post to defend car loans, insisting that "a car loan may well be a wise decision if you take a debt that is compatible with your income".  Do you agree with this statement?  Read the author's defense of car loans here: Is it wise to buy a car with a loan?

I wont unless I intend renting the said car out for car-hire or leased transport.

As far as I know and finance thought me, Car loan is a huge LIABILITY and WILL NOT embark on it. You are literally putting yourself in debt, and that one isn't a good debt.

i have done it once and did not regret. i have long completed the payment. currently i am using a brand new car that i bought with cooperative loan. and i am equally enjoying it. the fact that i have not been to the mechanic for two years except for routine services.

Car loan is ok. Why pay 2million cash down and become stressed due to other financial commitment. If the APR on the car finance is not more than 250k at the end of term of loan, then it's a good idea and if you are scared of loosing your job, i am sure you can take up a payment protection insurance.

I dont understand this phobia for debt, I guess it is a Naija thing. I cant remember properly but I can only imagine I must have shared the same ant-debt sentiments when I was in Naija. Life is for the living and as long as you take a loan that is within your means you should be fine. The only thing I have against car loans in Nigeria is the exorbitant borrowing rates, Up to 25% in some instances! Now thats crazy.

I took a car loan 2 years ago with an interst rate of 5.9%. I only have a year left and at the end I would have paid just over £3000 in interest. Life like I said is for the living and that amount is a price I am willing to pay since I know myself and I am not disciplined enough to save up the amount required to buy the car outright over 3 years but I know if I take a oan, I must pay it back otherwise my credit suffers.

^^ U mean 25% interest a month?

norrisman:

I dont understand this phobia for debt, I guess it is a Naija thing. I cant remember properly but I can only imagine I must have shared the same ant-debt sentiments when I was in Naija. Life is for the living and as long as you take a loan that is within your means you should be fine. The only thing I have against car loans in Nigeria is the exorbitant borrowing rates, Up to 25% in some instances! Now thats crazy.

I took a car loan 2 years ago with an interst rate of 5.9%. I only have a year left and at the end I would have paid just over £3000 in interest. Life like I said is for the living and that amount is a price I am willing to pay since I know myself and I am not disciplined enough to save up the amount required to buy the car outright over 3 years but I know if I take a oan, I must pay it back otherwise my credit suffers.

mainly because of

job security in Nigeria

the interest is usually killing

the process isnt straight forward not as accessible as it looks on paper

Never
Dem no swear for me nah!
Don't be swayed by all those flashy TV ads O!
How many up&coming folks take loans in 9ja?

@ norrisman, take up a 9ja loan so we can learn from your experience.
9ja banks give 2.5-4% on a fixed deposit of money yet charge up to 25% interest
Do the math yourself
That's why na society bigwigs dey really do loans in 9ja
Or didn't you see the names attached to non performing loans that Sanusi published some time back?
Or Arisekola's current tiff with GTB ?

I wish 9ja's economy could evolve like to be like that of where you are ASAP
Until then , I buy my car ca$h down

I did three years ago and I am still regretting the decision today.

Am I crazy?

The fear of bank loan is the beginning of wisdom. Even the Bank employees are scared of taking the loans because of job insecurity.

My policy is: If i dont have the cash for it, then it's not yet time to buy it. (BTW, "IT" can be anything)

My 2 cents.

Ultrame:

Am I crazy?

The fear of bank loan is the beginning of wisdom. Even the Bank employees are scared of taking the loans because of job insecurity.

My policy is: If i dont have the cash for it, then it's not yet time to buy it. (BTW, "IT" can be anything)

My 2 cents.

GBAM!!!!!!!!!

i strongly believe that there is no straight forward answer to this question.there are various factors to be considered before embarking on it(mainly the cost-benefit analysis). Intrest rates, your income flow,the maintenance cost of the car, how u value the convinience are some of the things you need to consider.

The topic simply says, will you buy a car with a bank loan, but on the front page, it says, Will you buy a car with a bank loan in Nigeria - can these moderators ever be as concise as the original post? You have given it a different meaning by adding "in Nigeria"

Nigerian bank loans are never the way they seem on paper,aside the exorbitant interest rates,there are equally hidden charges ie VAT on interest,handling charges.Moreover one has to look at unforseen circumstances like accidents and theft.In short,car loans in nigeria is only suitable for oil sector workers.

No no no no no nnooooooooo i wont touch that loan with the longest of pole ever seen in the world. That will amount 2 penny wise, pounds foolish.

Nigerians a re so bush. Yet they go abroad and collect credit cards and bank overdrafts and first thing that comes to their mind is to buy a car- even when they dont have a license to drive abroad. LOL

Diaz nothing wrong with dat, get an okay car not d one dat will kill me with gbese if i hit it and then consider my income, nothing will stop me wit dis 2 points.

I will and I have. It is easier 2 pay in instalments than upfront. Who gets salary payment upfront (govt, politicians, etc). The rest of us get paid in bits n its not easy 2 save up that kind of money. The interest is not too bad.

It depends on your income though.

It would be unwise to buy a car worth 10 million naira, when you only make 1.2 million naira per annum; it will take you forever to pay back the loan. However, if you make 20 million a year, and you need to, per job requirements, be able move around quickly and arrive at work on time, then investing in a car, with a bank loan, is not a bad thing, 'cos if you wait till when you'd have 10 million cash in hand, then, my friend, you will wait a long time.

BUYING CAR WITH LOAN HAS SOME CATEGORIES. IS IT FOR LEASURE/PLEASURE? IS IT FOR COMERCIAL? THEN IS BORROWER A CIVIL SERVANT? OR A

BUSINESS MAN WHO NEED IT TO RUN HIS BUSINESS?. BUT TO ME I CAN NOT TAKE A LOAN TO BUY CAR IF IS NOT GOING TO INCREASES MY INCOME.

BECAUSE OTHER FACTORS MUST BE CONSIDER.

BUYING CAR WITH LOAN HAS SOME CATEGORIES. IS IT FOR LEASURE/PLEASURE? IS IT FOR COMERCIAL? THEN IS BORROWER A CIVIL SERVANT? OR A

BUSINESS MAN WHO NEED IT TO RUN HIS BUSINESS?. BUT TO ME I CAN NOT TAKE A LOAN TO BUY CAR IF IS NOT GOING TO INCREASES MY INCOME.

BECAUSE OTHER FACTORS MUST BE CONSIDER.

if the Federal goverment of Nigeria would intervene and protect consumers from subprime lenders , i think geting a car on hire purchase is a great idea, provided you get something you can coveniently pay for, think about it the reason why people are corrupt and resort to crooked means to survive is because they want to have the basic things of life and its not easy to come by

for instance if a fresh graduate wants to legitimately save up for a car ,when would he be able to put the money together, there is a huge class difference between people who have and people who dont have in Nigeria, because things are not easy to come by, if buying a brand new car or brand new furniture and houses becomes easy for everyone then there would be no oppression

i live in the usa and when i was going to school and driving a taxi i was able to afford a brand new honda odyssey in 2006, whereas in Nigeria its even considered an insult for a taxi driver to think about buying a brand new car

getting a loan for a car in not a bad idea provided the interest rate is not ridiculous, you buy what you can afford and you have a steady source of income to pay for it

Couple of years ago I sought to buy a car through some banks based on the adverts they put on the newspaper and I discovered that:
1. The adverts are largely misleading, in short they are pure unadulterated lies. You will get an entirely different story the moment you step in there. One of the banks had advertised that you do not need to have an account with them, just provide all they are asking you to, but when I got there they said I am not eligible, I pointed out that the advert said having an account is not necessary, but the lady ignored me.
This is in addition to the fact that by the time you are shown the terms and conditions, you will disqualify yourself before they tell you you are not qualified.

2. I am not a financial person but by the time the amortization was explained to me I detected fraud in most cases.

My conclusion is the conditions of buying a car through the banks makes saving for the car look like a piece of cake, and if you finally do buy the car, talk to someone who understands the tricks the banks use to monitor your loan repayment or else you will repay what you rightly owe plus much more.
Here in Nigeria if you have good income that can assist you pay back the loan without stress and you are ready to put up with unprofessional Nigerian bankers then buy through the bank, otherwise buy with your cash and have fun.

As for asset or liability that is immaterial, what matters is do you need a car? Can you maintain the car?

No way Bro,

Not at all if i have not got the finance to purchase cash down i forget about it.

I dont think i will buy car with bank loan in Nigeria, but with coperative money i can buy car, all this will depend on my income

How can I do such a thing. I won't.

Car loan is the only sure means a salary earner can own a brown new car. Why pay #4.5 once when u can do it installmentally and invest the money elsewhere

so people buy cars with loans?