advice please

[sbu22]

Im buying a new vehicle..fnb has given me prime -1 linked and a fixed interest rate of 12%

Mercedes financial services gave me prime linked and 11 % fixed.

Now, im not clued up about the market and whether interest rates are likely to rise or fall.

So my question is, which is the better option?

 

[InternetSwag]

what car and how much are you paying

 

[sbu22]

C class coupe 250...520k including a few extras

 

[InternetSwag]

excuse my bad math, but I see it this way.

I = PRN/100

I = end total

P = original price

R = interest rates

N = time that you'll be paying it off.


Assuming N = 5 years it goes as following.

I = PRN/100

I= 520*11*5/100

I = 286

286 + 520 = 806.

I guess 806k, that seems awfully high.

 

[buyeye]

the prime -1

 

[sbu22]

The prime -1 sounds tempting but what if interest rates go up?

 

[guest2013-1]

The prime -1 sounds tempting but what if interest rates go up?

Then it goes up. What of it?

 

[sbu22]

Lol..i must have gotten bad advice or i misunderstood what they were sayinf but i wad told that a fixed interest rate is much better then a.linked one...

Can someone pkease shes light on the different types..why give me a linked or fixed option?

 

[upup]

They say it will go up later this year.
I also must buy a car and are going to go normal, not fix.

 

[D3x!]

Ok well firstly what happened to your R400k and your golf 5 gti you bought last month?

 

[hellfire]

Lol..i must have gotten bad advice or i misunderstood what they were sayinf but i wad told that a fixed interest rate is much better then a.linked one...

Can someone pkease shes light on the different types..why give me a linked or fixed option?

What do you do for a living?

 

[HavocXphere]

Rates are unlikely to hike more than 3%, so the prime -1 is best. With a spread like that I'm guessing its fixed for the entire term & on that time frame its any ones guess tbh. They'll push rates up a bit because of the food, med, petrol and the SANRAL BS effects on inflation, but how much...nobody knows.

Fixed is low risk, but more expensive. Floating is more risky, essentially its a gamble that interest rates won't shoot up.

 

[sbu22]

@ d3x...if you remember, the gti was a favour for a friend and only 90k.. I bought it and quickly flogged it off as per advice i got from you guys ...funny how easy it is to sell something when you are desperate for time. I had a buyer in less then a week for 140k....who was i to deny that kind of profit...

 

[D3x!]

@ d3x...if you remember, the gti was a favour for a friend and only 90k.. I bought it and quickly flogged it off as per advice i got from you guys ...funny how easy it is to sell something when you are desperate for time. I had a buyer in less then a week for 140k....who was i to deny that kind of profit...

nice man!

ok but not to pry then why u not buying cash?

or are you earning better interest than you will be paying?

 

[sbu22]

Again the advice i got from here persuaded me not to buy cash...
But i guess im just a sucker for a benz..

To answer your question about interest, no, its close but not better but atleast my money is secure. What i`ll be putting in about equates to me just buying a smaller car.

Maybe im just justifying my purchase...i just like that car.

 

[sbu22]

Come to think of it, any advice on petrol vs diesel on this car?

 

[hellfire]

What do you do for a living?

OP, this was a serious question...

I can't afford a half-bar car and I've known how interest rates work since high school. I obviously need to be doing whatever it is you are doing...

 

[InternetSwag]

It would take me 18 years of 90% of my salary to pay off that car.

 

[HavocXphere]

OP, this was a serious question...

Last I heard he was doing some type of gov tendering or importing machinery for them or something along those lines. Might have been a once off deal though.

@InternetSwag: You forgot compounding.

 

[InternetSwag]

Last I heard he was doing some type of gov tendering or importing machinery for them or something along those lines. Might have been a once off deal though.

@InternetSwag: You forgot compounding.

I tried it but I been out of school too long.

I = P(r/100 + 1)n

Or something like that? That's rates being re-applied every x amount of months/years/days.

yeah? Eh I really feel stupid atm.