I recently started my first job after college/ (Polytechnic? translated from the Swedish word "Yrkeshögskola"). I have worked as a system developer since August where I had my praxis twice before finishing school. I have a 6 month probation and since my boss has been very happy with the work I've done, I will most likely be extended to an indefinite period.

I am thinking of buying my dream car in June of next year. I earn an alright monthly salary and it will increase if I get extended, as will my savings.

I'm saving approximately 12.000 SEK each month (gifts and other income not included). I have a fully paid off car that I will be able to sell for 110.000-130.000 SEK.

I figure that my savings will be around ~200.000 - 230.000 SEK after I have sold my car. The car I want to buy costs around 350.000 SEK used.

How could I best set up a payment plan if I buy this car? Should I try and pay off as much as possible at purchase and set up the rest as a monthly payment for 24/ 36 months = 6500 SEK/ 4165 SEK monthly? This would be the amount if I set up a pay off of 150.000 SEK.

Or would it be better to setup the car for pay off monthly with a 20% payment on purchase? 300.000 SEK on a 36 month set up will be rougly 8300 SEK/ month.


  • This plan will not be executed unless I get extended.

  • I live in Sweden which is why I use the SEK currency. 100.000 SEK = ~ €9600.

  • I have no current debt


To make things more clear. The car I'm referring to is a BMW E92 M3. This car has already started climbing in price's in Sweden, when looking at the newest, low-mileage models. Because it is considered a collectible future car I am not sure waiting another year would make it more of a bargain for me.

  • 4
    Use the 100% down plan. In about a year you will have enough to buy your dream car for cash, and probably less if you get a raise and are truly motivated.
    – Pete B.
    Commented Oct 26, 2018 at 12:52
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    When you mention the "100% down plan", do you mean paying the car fully at purchase? In case that is not what you meant would you please explain?
    – FilipE92
    Commented Oct 26, 2018 at 13:03
  • 6
    The "100% down plan" means "wait another year and pay everything up front". That would mean 0 SEK in interest costs :) Commented Oct 26, 2018 at 13:20
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    If your dream car is indeed your dream car (this year's model), then in 1 year it will be even better because it will be substantially less expensive. Go with the 100% down plan. Never finance anything if you don't have to. Alternatively, consider you already own a car and that part of your life is taken care of. You may be better off putting aside what you would pay for your dream car and drive the one you have until it no longer functions. Then you can see what dream you can afford
    – Kai Qing
    Commented Oct 26, 2018 at 15:49
  • @JobjörnFolkesson The issue in this case is that the value of these models have already started rising. As it is considered a future "collectible". Therefore I might lose more waiting another year than what the interests would've cost me?
    – FilipE92
    Commented Oct 29, 2018 at 7:22

4 Answers 4


The less you borrow, the less you'll pay in interest. Say you can get a car loan with 5 % effective annual rate (effektiv ränta in Swedish):

  • If you pay 200 000 SEK up front and borrow 150 000 SEK for 36 months, you'll pay 4 496 SEK per month. In the end, you'll have paid 11 843 SEK in interest.
  • If you pay only 70 000 SEK (20 %) up front and borrow 280 000 SEK for 36 months, you'll pay 8 392 SEK per month. In the end, you'll have paid 22 107 SEK in interest.

All in all, it depends on how much debt you're comfortable with taking on and how much cash you want to have in the bank to feel safe. This depends on your own situation in many aspects, and I nor anyone else can make the decision for you, but financially it makes sense to pay as much as possible up front to avoid unnecessary interest costs.

  • This is the first time I would be making a payment like this, the previous cars I have had I have been able to pay off 100% on purchase. The first option obviously is cheaper for me, regarding interests. However it would also be good to have an amount of money in the bank, after the purchase. Hard question, I agree. Although hearing what others have to say gives me a good perspective of what options I have.
    – FilipE92
    Commented Oct 26, 2018 at 13:08
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    A good rule of thumb is having the equivalent of three months' wages in the bank for emergencies. That of course depends on your own situation: how stable is your job, do you have kids, etc. On the other hand, in a worst case scenario you could always sell the car. I personally would do as @pete-b suggested and hold out long enough to pay everything up front :) Commented Oct 26, 2018 at 13:24
  • I understand this is a difficult question to answer, however I feel your answer gave me the best insight to my question, therefore i will accept it. Thank you for your feedback.
    – FilipE92
    Commented Oct 29, 2018 at 8:59

You want to minimize what you pay on interest. That means having as large a down payment as possible, and the shortest repayment term you can manage. If you have any choice that give you different interest rates, figure that in. Like in the US, shorter term loans usually have a lower interest rate than longer-term loans.

Of course the easiest way to reduce the amount of interest is to buy a cheaper car. Buying a brand new car when you've been working less than a year is, in my humble opinion, a big mistake. My first car cost $700 (=~ 6300 SEK) (Okay, that was 40 years ago and there's been a lot of inflation since then.) I didn't buy a new car until I was in my 30s, and that was a cheap one.

  • This is definitely not a brand new car. In that case it would be double the value of what I have stated. However the interest rate's that you mention works kind of the same in Sweden, Shorter loans means shorter interest. This car have already reached it's bottom in Sweden and has started to climb in prices. See edit.
    – FilipE92
    Commented Oct 29, 2018 at 7:28
  • Ok, not new. You say the price is 350,000 SEK. That comes to about US$38,000. I don't know what typical car prices are in Sweden, but that's about the cost of a typical new car in the U.S. So okay, not a new car, but a fairly expensive used car. My basic point remains the same: It's a lot to spend on a car for someone who's been working less than a year.
    – Jay
    Commented Oct 29, 2018 at 19:57
  • Of course there are cars valued below $30,000 brand new in sweden, however I meant that the specific model would be double the value when it was brand new. It has depreciated and the more exclusive models have already reached bottom prices. Of course I wont be buying the car as an investment, I know better than that. At best, the depreciation value for me would be less than some other "regular cars" I understand your point, Although I bought my first car at $7000 after ~5 months work. 8 months later I changed it for a $16,000 car, my current. I am extremely persistent when I want something :s
    – FilipE92
    Commented Oct 30, 2018 at 6:53

Never loan money to buy anything "consumable" (as opposed to investments, but that is mostly a house or a flat) that isn't a disaster. Emergency dental care is ok to loan money to. Or if your freezer or refrigerator breaks down. Maybe a funeral that requires a trip abroad or so. Everything else, save before you buy. No exceptions.


Welcome new user.

You are taking money, and burning it in a pile.

Never spend more than about 45.000 SEK on a car.

Your current car is way too expensive. Sell it and buy a 45.000 SEK car.

The idea of buying a new car is so totally bizarre ..... just forget it. Get a piece of paper and write down how much you'll throw away on (merely) insurance, as one problem.

It's not in the bounds of reason.

If you are profoundly rich, sure, get a brand new car each year. ("New" cars are a joke after about 12-18 months ... they are then exactly the same in every way as a normal 50.000SEK car.) For any other than the profoundly rich, a "brand new car" is so far from the bounds of realty it can't be discussed seriously.

That being said, we now know OP is talking about


I mean, everyone should own a few V8s. :)

It is possible (possible) that depreciation will be a bit lower than on an everyday vehicle.

  • You start by telling me never to spend more than 45.000 SEK on a car. Then you tell me to sell my current and buy a 50.000 SEK car? First of, I dont think another person could tell somebody if their car is way too expensive, It would probably depend on that specific person's financial status? Which is why everybody drive different kinds of cars. If I would buy a car at that prize I would probably be able to pay insurance. What about the fact that almost 1/3 of Sweden's drivers lease their cars? Those cars are often brand new. Im sorry but I dont consider your answer helpful..
    – FilipE92
    Commented Oct 29, 2018 at 7:52
  • 1
    Sure, that is your opinion. I will respect that. I just meant that I dont think you/ anyone can decide whether someone else's car is too expensive. It's probably up to the individ. However the car I'm interested in buying compared to the one I've got at the moment have quite a big difference, regarding performance, reliability and features. It's a much better car in all ways, except KM/L. About me stating it's reached bottom prices.. I dont mean that this car will rise in prices like for example the BMW E30 M3, but I dont think the total loss will be huge either. All depends on how I use it.
    – FilipE92
    Commented Oct 29, 2018 at 8:55
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    @FilipE92 - Welcome to Money.SE. Personal Finance is, as the title says, "Personal". Members often have different views on the same issue. Fattie is our member who strongly believes in only buying used cars. Strongly. Commented Oct 29, 2018 at 9:34
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    @JoeTaxpayer I don't think I've ever seen Fattie hold any opinion less than Strongly.
    – stannius
    Commented Oct 30, 2018 at 17:31
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    LOL @stannius ...
    – Fattie
    Commented Oct 30, 2018 at 17:32

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