Car Refinance Options?

Wrath of Khan MD said:
who on earth has savings when you're burdened with massive debt...

that makes no logical sense

pay off the car and any other expenses, you are losing more than anything. Then decide what you want to do car wise
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The car is the only debt we have. And this is what I thought but asked chatgpt a whole calculation thing and it said that keeping the money in it's current investment would mean a greater amount in interest vs. paying it off now
 
PotatoGuardian said:
The car is the only debt we have. And this is what I thought but asked chatgpt a whole calculation thing and it said that keeping the money in it's current investment would mean a greater amount in interest vs. paying it off now
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Unless your investment is consistently making 12.25% or more then that simply can't be true.

And if it's truly an emergency fund it shouldn't be locked up into an investment making that kind of return anyway.
 
PotatoGuardian said:
The car is the only debt we have. And this is what I thought but asked chatgpt a whole calculation thing and it said that keeping the money in it's current investment would mean a greater amount in interest vs. paying it off now
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Stop being a GenZ and relying on AI, do the hard work yourself.
 
PotatoGuardian said:
Can you explain more about what you mean? do you mean I'm bamboozling myself because the car has depreciated it but if I adjust the loan I'm avoiding that awareness?
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Yes exactly. There's no real loss (vs. the status quo) if you sell or pay down the balance. The real loss is paying interest you don't have to pay.

It's opportunity cost. The 12.25% rate, if you don't have to pay it, is essentially a risk-free (and tax-free) return - compared to 7-8% in a bank account.

PotatoGuardian said:
chatgpt a whole calculation thing and it said that keeping the money in it's current investment would mean a greater amount in interest vs. paying it off now
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Not for equal risk though. You can also invest in Nvidia using your credit card. That's essentially what ChatGPT is suggesting here. You can see the problem.

PotatoGuardian said:
Maybe risky was the wrong word but if withdrawing other funds for an emergency would mean paying capital gains tax
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That's a legitimate issue. Remember you both have R 40k exclusion that you should be using annually anyway (to step up your base cost).
 
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So without numbers and more details its hard to give advice.

Depending on what you want to achieve i.e. Protect/improve your cashflows, to allow you take on more debt. Or reduce your debt and cashflows etc. Different advice can be given, depending on the objective/goal.
 
SauRoNZA said:
Unless your investment is consistently making 12.25% or more then that simply can't be true.

And if it's truly an emergency fund it shouldn't be locked up into an investment making that kind of return anyway.
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Some of the money is yes the bits that are would incur CGT
 
Tomtomtom said:
Curious why the baby is the reason you need a second car then?
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Because one of us needs to be in the office from 7am. At the moment we both just go in early but baby is going to go to daycare from 4months and the earliest drop off is 7:15 and then there is a whole few extra thousands depending on how late pick up is. (but also shame).

Not to mention that prams and all equipment won't fit in the current car either. (no baby was not part of the plan when the car was bought but such is life)
 
PotatoGuardian said:
Worked this out and because I put down a big deposit on the car and paid extra if I sell it now I’d “lose out” What we’d get for it would pay off remaining debt and not leave much for spare anyway to refinance two new cars. Even cheaper ones. I did a whole thing on ChatGPT for calculations.

Already moved out of the mouldy place. RHT pushed on our behalf to get our deposit back due to landlord negligence of maintenance
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You will lose a lot more by continuing the finance. Pay off your debts ASAP.

There is no gain in buying a car, no matter how small or large deposit. You will always lose because they always depreciate. This is why nice cars are terrible financial decisions, unless it's money you can afford to lose...
 
rh1 said:
So without numbers and more details its hard to give advice.

Depending on what you want to achieve i.e. Protect/improve your cashflows, to allow you take on more debt. Or reduce your debt and cashflows etc. Different advice can be given, depending on the objective/goal.
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I'm realising this. I thought I'd get a straight answer whether I could refinance or not but so far the questions have been useful to think about
 
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Mike Hoxbig said:
This is why nice cars are terrible financial decisions, unless it's money you can afford to lose...
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You're wrong. I was just tired of leaning forward when driving up hills (I'm half joking). It's really the most entry level Audi. It's more like unexpected life happened and obviously had we know a different decision would have been made.

We won't be destitute or in a bad financial position. I was just trying to think about how to best deal with the situation we're in now and how I can save the most money (in the long term) and protecting emergency money
 
PotatoGuardian said:
Because one of us needs to be in the office from 7am. At the moment we both just go in early but baby is going to go to daycare from 4months and the earliest drop off is 7:15 and then there is a whole few extra thousands depending on how late pick up is. (but also shame).

Not to mention that prams and all equipment won't fit in the current car either. (no baby was not part of the plan when the car was bought but such is life)
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We managed to fit a pram and two babies into an i10. Just takes a few seconds of shoving and swearing, plus realising those huge wheels are actually detachable.

But ja those logistics are a problem. I would still delay pulling the trigger to the last minute - every day without another depreciating asset is money in your pocket. Briefly, before it goes to nappies.

Also, the trains in CPT have gotten much better lately.
 
Tomtomtom said:
We managed to fit a pram and two babies into an i10. Just takes a few seconds of shoving and swearing, plus realising those huge wheels are actually detachable.

But ja those logistics are a problem. I would still delay pulling the trigger to the last minute - every day without another depreciating asset is money in your pocket. Briefly, before it goes to nappies.

Also, the trains in CPT have gotten much better lately.
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Definitely weighing up the options about the car and didn’t want to make a rash decision.

We were also using the train we’ve just moved further from the station now. But we’re not that far away that we could jump on a taxi. They are all full by the time they get to us going to the station.

Could maybe walk for 30mins but not the safest when travelling with work laptops
 
PotatoGuardian said:
You're wrong. I was just tired of leaning forward when driving up hills (I'm half joking). It's really the most entry level Audi. It's more like unexpected life happened and obviously had we know a different decision would have been made.

We won't be destitute or in a bad financial position. I was just trying to think about how to best deal with the situation we're in now and how I can save the most money (in the long term) and protecting emergency money
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It's nice for me. I can't (or won't) afford an entry level Audi and I earn well. Wait until school starts, then come back and tell us if you can afford a new Audi...
 
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