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  • FIRST POST
    • silverdream
    • By silverdream 14th Jul 17, 1:31 AM
    • 6Posts
    • 2Thanks
    silverdream
    First time car buyer - advice appreciated!
    • #1
    • 14th Jul 17, 1:31 AM
    First time car buyer - advice appreciated! 14th Jul 17 at 1:31 AM
    Hi all,

    I'm hoping to pass my driving test in the next few months so have been looking at my options for purchasing a car.

    I was thinking of spending ~£5k on a used car. I currently have this in savings but if I use this towards a car this will literally wipe out my savings and I will have no 'rainy day' money. Is this advisable?

    I know that other options include credit cards, loans and dealer finance (not 100% sure how this works so would appreciate an explanation for the absolute beginner!). Which of these options tend to be best or are the most commonly used?

    Insurance is another consideration as I am not yet 25 so this is bound to be a hefty monthly payment.

    Appreciate any thoughts on how best to approach this
Page 1
    • Richard53
    • By Richard53 14th Jul 17, 2:33 AM
    • 2,456 Posts
    • 2,121 Thanks
    Richard53
    • #2
    • 14th Jul 17, 2:33 AM
    • #2
    • 14th Jul 17, 2:33 AM
    A car at that price will need some work doing from time to time. Don't spend the whole £5k on the car, but perhaps spend £4k and have an emergency fund of £1000 for when it 'fails to proceed'. Peace of mind. There isn't a huge difference between a £4k car and a £5k car if you buy wisely.


    I have a long-standing dislike of debt in any form, so I would say pay cash and put money you were thinking of paying monthly on a loan into your insurance, and perhaps into a savings account for maintenance, tyres, MoT repairs, eventual replacement and so on.


    If it is your first car, please check what the manufacturer's recommendations are for routine servicing, and carry them out. This will probably mean an annual service at the least. Yes, it costs money, but there is no better way of ensuring the reliability and long life of a car.


    Good luck and have fun with it.


    ETA: also, spend a bit of time asking people for recommendations for a good, honest local garage. With a car of that age, you won't be using a main dealer, and you should avoid chains like Kwik-Fit for things like routine servicing and repairs if at all possible. A good local mechanic with oil under his fingernails and a busy operation is worth his weight in gold if you are not able to do your own mechanical work.
    Last edited by Richard53; 14-07-2017 at 2:36 AM.
    An hour alone spells freedom to the slave.
    • bengalknights
    • By bengalknights 14th Jul 17, 9:58 AM
    • 4,041 Posts
    • 1,479 Thanks
    bengalknights
    • #3
    • 14th Jul 17, 9:58 AM
    • #3
    • 14th Jul 17, 9:58 AM
    You could give bangernomics ago that way if you damage it you wont really care and your savings will still be intact
    • silverdream
    • By silverdream 14th Jul 17, 2:09 PM
    • 6 Posts
    • 2 Thanks
    silverdream
    • #4
    • 14th Jul 17, 2:09 PM
    • #4
    • 14th Jul 17, 2:09 PM
    Thank you for your advice! Is insurance significantly more expensive to pay monthly than it is to pay annually? Definitely agree a local mechanic with a good reputation is a must.
    • neilmcl
    • By neilmcl 14th Jul 17, 2:36 PM
    • 9,720 Posts
    • 6,741 Thanks
    neilmcl
    • #5
    • 14th Jul 17, 2:36 PM
    • #5
    • 14th Jul 17, 2:36 PM
    Thank you for your advice! Is insurance significantly more expensive to pay monthly than it is to pay annually? Definitely agree a local mechanic with a good reputation is a must.
    Originally posted by silverdream
    Strictly speaking there's no such thing as "monthly" car insurance, unless you're talking about temporary insurance, it's simply an annual policy where you have the choice to pay in one lump sum or to essentially take out credit to pay for the policy and you repay this plus interest on a monthly basis. Clearly the latter is the more expensive option because you have that interest element to pay as well.
    Last edited by neilmcl; 14-07-2017 at 5:41 PM.
    • andrewf75
    • By andrewf75 14th Jul 17, 4:59 PM
    • 6,896 Posts
    • 11,335 Thanks
    andrewf75
    • #6
    • 14th Jul 17, 4:59 PM
    • #6
    • 14th Jul 17, 4:59 PM
    Always a good idea to hold some savings back, but equally no need to go to the extreme of bangernomics if you have 5k in the bank. You can get very decent cars for 2-3k so have a look around. But no-one can really advise - it depends how much you want a more expensive car v how much you want to keep some savings! You're not reliant on finance though, thats the main thing. A lot of people have no choice.
    • khcomp
    • By khcomp 14th Jul 17, 5:01 PM
    • 201 Posts
    • 83 Thanks
    khcomp
    • #7
    • 14th Jul 17, 5:01 PM
    • #7
    • 14th Jul 17, 5:01 PM
    Hi;
    Firstly, it's perfectly possible to buy an utterly reliable car for £1,000 or less: You just need someone who knows what they're doing to find you one. There is absolutely no guarantee that a £4-5,000 car will require any more maintenance than a £4-500 one, even from a dealer.
    As has been said, find a good, local, independent, trusted garage or mechanic - ask friends and family - and use them. They may well be able to advise on a car too.
    As you're young and a new driver, there's a good chance that your insurance will be a large part of your running costs: I suggest that you wait until you pass, find a car that suits you and get some quotes: This may be the deciding factor on what car you can afford; bear in mind that older, cheaper cars can be more expensive to insure than similar newer models. Make sure you also consider maintenance costs, fuel economy, road tax etc.
    Most insurers will allow you to pay your insurance premium by monthly instalments, but most will charge quite a lot for the privilege of doing so. Insurance comparison websites will usually show annual price, and total cost if paid monthly.
    • silverdream
    • By silverdream 14th Jul 17, 8:10 PM
    • 6 Posts
    • 2 Thanks
    silverdream
    • #8
    • 14th Jul 17, 8:10 PM
    • #8
    • 14th Jul 17, 8:10 PM
    Strictly speaking there's no such thing as "monthly" car insurance, unless you're talking about temporary insurance, it's simply an annual policy where you have the choice to pay in one lump sum or to essentially take out credit to pay for the policy and you repay this plus interest on a monthly basis. Clearly the latter is the more expensive option because you have that interest element to pay as well.
    Originally posted by neilmcl
    So could you put this one lump sum on a 0% credit card and pay it monthly that way? Or is that not allowed?

    Always a good idea to hold some savings back, but equally no need to go to the extreme of bangernomics if you have 5k in the bank. You can get very decent cars for 2-3k so have a look around. But no-one can really advise - it depends how much you want a more expensive car v how much you want to keep some savings! You're not reliant on finance though, thats the main thing. A lot of people have no choice.
    Originally posted by andrewf75
    Thank you If it has four wheels, a steering wheel and is safe then I'm happy!

    Hi;
    Firstly, it's perfectly possible to buy an utterly reliable car for £1,000 or less: You just need someone who knows what they're doing to find you one. There is absolutely no guarantee that a £4-5,000 car will require any more maintenance than a £4-500 one, even from a dealer.
    As has been said, find a good, local, independent, trusted garage or mechanic - ask friends and family - and use them. They may well be able to advise on a car too.
    As you're young and a new driver, there's a good chance that your insurance will be a large part of your running costs: I suggest that you wait until you pass, find a car that suits you and get some quotes: This may be the deciding factor on what car you can afford; bear in mind that older, cheaper cars can be more expensive to insure than similar newer models. Make sure you also consider maintenance costs, fuel economy, road tax etc.
    Most insurers will allow you to pay your insurance premium by monthly instalments, but most will charge quite a lot for the privilege of doing so. Insurance comparison websites will usually show annual price, and total cost if paid monthly.
    Originally posted by khcomp
    Good points, thank you
    • neilmcl
    • By neilmcl 14th Jul 17, 8:25 PM
    • 9,720 Posts
    • 6,741 Thanks
    neilmcl
    • #9
    • 14th Jul 17, 8:25 PM
    • #9
    • 14th Jul 17, 8:25 PM
    So could you put this one lump sum on a 0% credit card and pay it monthly that way? Or is that not allowed?
    Originally posted by silverdream
    Yes, do this.
    • Alice Holt
    • By Alice Holt 14th Jul 17, 8:30 PM
    • 1,225 Posts
    • 1,311 Thanks
    Alice Holt
    Good idea to involve friends and family.
    Anyone you know thinking about changing their car?
    If a car with a good history can be passed on to you from a family member etc that could well be the best option.

    I certainty wouldn't spend all your savings. Many cars for sale at £4k ish will need money spent on them (probably one reason that the previous owner has decided to sell).
    Perfectly possible to find a £1k car that isn't a money pit - just needs patience and some degree of luck.
    • Tarambor
    • By Tarambor 14th Jul 17, 9:59 PM
    • 887 Posts
    • 594 Thanks
    Tarambor
    DO NOT UNDER ANY CIRCUMSTANCES GET YOURSELF INTO DEBT TO BUY A CAR. It just isn't worth it. The 0% route is not a bad idea and technically you're not adding debt as long as you maintain the savings to cover it, in fact it is a wise option to use because your £5k that you would have spent in one go will be sat there in the bank gaining interest, effectively saving you money over the period of the 0% deal.

    Failing the 0% route another way to look at it is because you won't have the millstone of debt repayments around your neck if you buy cash then you'll be able to rebuild your stash quite quickly.

    Many cars for sale at £4k ish will need money spent on them
    But that applies to any car of any amount. There is no magic figure that means you're guaranteed not to have to spend money on them especially given that things like tyres, brakes and clutches wear out just by the vehicle moving from one point to another. Unless you are buying a car with a manufacturers warranty on then there is a chance you'll be paying for repairs and even with that warranty you're going to be paying out for at least a couple of sets of tyres and a set of brake pads and discs.
    Last edited by Tarambor; 14-07-2017 at 10:02 PM.
    • macman
    • By macman 14th Jul 17, 11:18 PM
    • 40,944 Posts
    • 16,755 Thanks
    macman
    Check out the insurance cost based on the kind of vehicle you are considering before you do anything else: you could easily be looking at upwards of £2K with a new licence. Any comp site can do this for you. Get an experienced driver with a clean record and licence added to the policy as a named driver.
    Remember that the major risk that the insurers face with new drivers is third party claims, so don't think that buying a £1K banger insured TP only will reduce your costs very much.
    No free lunch, and no free laptop
    • Tarambor
    • By Tarambor 15th Jul 17, 11:14 AM
    • 887 Posts
    • 594 Thanks
    Tarambor
    Check out the insurance cost based on the kind of vehicle you are considering before you do anything else.
    Originally posted by macman
    I would like to add to this. Don't assume that just because it is a small hatchback or has a small engine it will be cheap. It cost my 19 year old son £500 less to insure a 2 litre Mondeo Estate than it did his 1.2L Ford Fiesta when he blew up the Fiesta and was shopping around for a new car. Fiesta was £1200, the Mondeo was £700, both fully comp.
    • melb
    • By melb 15th Jul 17, 11:55 AM
    • 2,478 Posts
    • 940 Thanks
    melb
    which insurance company was that with please? Sounds a good deal - also I am surprised in the difference in the prices, although maybe they assume it will be a "boy-racer" type driver in the Fiesta and a safer driver in the Mondeo?
    • takman
    • By takman 15th Jul 17, 5:35 PM
    • 2,399 Posts
    • 2,012 Thanks
    takman
    I would recommend that you get a car for around £1000 - £2000 as it's your first car and you can get a fairly decent car for that price.

    You can then use the rest of your money for any repairs and servicing that the car requires. You can also pay your insurance in full using your savings and then save an amount monthly that will replace this money after 12 months.
    • silverdream
    • By silverdream 15th Jul 17, 8:48 PM
    • 6 Posts
    • 2 Thanks
    silverdream
    Thank you all for your advice ��

    As many of you have suggested, I'm going to try and spend 1-3k on a decent little runaround using my savings. For insurance I am going to try and use a 0% credit card and pay it off monthly. I've also started looking at quotes for different cars to get an idea of which may be the cheapest to insure.
    • khcomp
    • By khcomp 16th Jul 17, 11:00 AM
    • 201 Posts
    • 83 Thanks
    khcomp
    which insurance company was that with please? Sounds a good deal - also I am surprised in the difference in the prices, although maybe they assume it will be a "boy-racer" type driver in the Fiesta and a safer driver in the Mondeo?
    Originally posted by melb
    Insurance companies use databases: Insurers generally have a 'basic premium' of £x, which is then added to for various things seen as risks - young driver, cheap old car (because their drivers tend to be less careful), cars popular with young drivers (anything 3 door with a small engine usually, as these are more likely to be bought by young, inexperienced drivers and therefore more likely to be involved in claims), location, etc. etc.
    Therefore, there are some risks that you are stuck with (age, experience, etc.), but your choice of car is a MASSIVE variable. In this instance, young drivers don't buy large cars with big engines, so the database will have little or no history of risk on such vehicles. Even different models of the same car can vary massively - When my oldest daughter was 17, I bought her a very nice VW Beetle 2.0: under £1,000 fully comp, whereas the 1.4 model was quoted at nearer £2,000.
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