Best loan for an 18 year old?

koopa_coffee

ALIBOBSY wrote: »

If you are on £400 a week and live at home you should easily be able to save £200 a week, ie £800 per month so a few months will get you your car without any future debt.

good luck
ali x

The OP is actually on £400 a month not a week, although your advice still stands strong.

I myself am on a similar wage to the OP (slightly lower at £370 a month). For the last few years I've been tucking away £200 at the start of every month and more if I have any spare at the end of the month. I have been able to buy myself a new laptop with this money as well as have a decent size portion to help towards my masters degree that I will be undertaking in October.

mumisworried

ALIBOBSY wrote: »

OK before you jump in can I just post something to think about. My OH wishes he could go back and tell his 18 yr old self what he knows now. You have the chance to get that advice from people who have been there, done that, and bought the t-shirt.

My OH looks back at the money he wasted and wishes so much he had started to at least save some of it. He ran up store cards and loans all of which he paid off no problems because of his wage ( he was on about 17k around 20 years ago so a good wage), but he wasted so much on interest and designer clothes and just general "rubbish".

If you are on £400 a week and live at home you should easily be able to save £200 a week, ie £800 per month so a few months will get you your car without any future debt.

good luck
ali x

I think he earns 400 MONTHLY not weekly. It's like watching my son all over again. The banks are so quick to lend. At 18 no-one should be in this much debt.

IWantToBeFree_2

Even at £400 a month he coud have the money in 6 months if he was careful! I don't understand why people are so desparate to get themselves into debt at 18, I wish I knew then what I did now and it would have saved a hell of a lot of interest payments!!

Burlesque_Babe

You don't need to spend this much on a car. One of the best cars I ever had was a 1994 VW Vento - basically a Golf with a boot, not many made because it wasn't cool enough for the Golf owners and not posh enough for the Passat owners . I paid £275 and it was such a sturdy and reliable car. I was gutted to sell but had to change to an automatic due to an injury.

I sold it for £400 and could have sold it a dozen times over with the number of calls I had.

You also don't need £1000 for car related stuff.........whatever that is

Getting into that much debt at 18 is dumb, sorry to be blunt, but it is.

I doubt you'll listen to the advice to be honest, because you've already applied to Natwest and are still looking. Also remember that every credit search leaves a footprint on your file, do many more applications and it will be a straight rejection as the lenders will see you as desparate.

Even the plan to pay back a lump sum is flawed as you'll have all the interest to pay, particularly if it's a front loaded loan. Where is this lump sum money coming from for you to be so sure? Even so, you'll still incur interest and early repayment charges if you clear it early.

slig

Why did you take out a loan for £4000? You said you were going to go for £2000 instead. If you are absolutely sure you want to get the loan, then PLEASE get it for £2000 not £4000. If you get a £4000 loan you will either end up getting a ridiculously expensive car that will cost a fortune to insure and thet you could easily end up writing off, or you will get a £1500 car using your original costings and fritter away the extra grand on nothing.

If you earn £400 a month, and you will be paying £100 of that off the loan, how are you going to afford to save up for next year's insurance? You'll probably need to put aside another £100 a month for next year's insurance, is that really feasible??

What happens if in two or three years you want to go to college or uni, or travelling, or save up for a house deposit, or rent with friends? You're stuck with this loan for five years, I know it's hard to look ahead to the next five years, but believe me, you WILL regret taking out this loan.

My first car cost £250 plus an extra £100 or so to get it through the MOT, insurance was £450 in the first year (I was about 21 though). It is still my car now. It's not a complete old banger either, it's pretty old but hasn't done a huge amount of miles, and it's purple .

Why not save all your earnings next month, buy a car for £400, and pay the insurance in installments (some do installments that effectively function as a loan, avoid those ones and find one that doesn't charge you extra for paying in installments)?

RobertoMoir

will369 wrote: »

Because it wont take me a few months to save up £1500

So how will you pay for next year's insurance, as that will still be quite substantial? Are you planning to take out ANOTHER loan next year then?

Loans at the rates you've been offered aren't much more than a tax on youth and poor maths skills.

ALIBOBSY

Opps seen the change to £400 per month. Even more reason not to go near a loan.
In 5 years where do you see yourself? Still at home "easily covering" this loan or more likely stuck at home unable to move out BECAUSE of this loan which becomes a millstone around your neck.

If you insist on a loan just take 1k not 4. This will get a good starter car and you can pay the insurance monthly. There is no point paying yearly unless it is cash to avoid the interest on monthly payments. Talk to your family, perhaps they could lend you the cash to buy the car and you can pay them back?

Alot of us on here got drawn in to the loan/card cycle which is how we got into debt.
I bet you went into the bank to apply for just 2k and they "suggested" you get 4 k instead to "cover any extra costs"

Please don't do this, at least not without some real thought.

ali x

Lokolo

I love this OP.

Ames

My dad gave me some great advice about car loans. Don't take out a loan where the length of the loan is longer than you'll have the car for. You're 18. Do you really think you'll want the same car when you're 23? Wont you want something a bit bigger, or newer, then? When either you're earning a lot more, or have graduated? How do you think you'll feel when you're 23 and still paying off your first years insurance? How will your partner (cos you'll probably have one then) feel about you saying 'I can't afford a holiday because I'm still paying for a car I used to have'?

My first car cost £1200, I was lucky enough to have an inheritance to buy it with. I had that for 2 years. Then I got a good deal on a Fiat Cinquecento, which I had for a year and sold for what I'd paid for it, £1200. Then I got a loan for a Fiesta, which was 18 months old and I had it for five years, and only just managed to pay off the loan with what I got when I sold it, the loan was for £6k. I'm sorry, but there's just no way you'll still have a car that costs a grand in five years time. Either major things will start going wrong with it and it wont be worth keeping, or it wont fit your image or needs and you'll need something else.

Please don't get a loan, save up for an old banger instead. That way the insurance will be cheaper and you'll be able to build up no claims for when you can afford to buy a better car outright.

the_rottweiler

What happens in these uncertain times if you lose this job, you could get ill, or be made redundant.
My 16 year old son wanted driving lessons for his 17th birthday in dec, but has now changed his mind because he knows it will be a long time before he can afford insurance and a car. he has decided on a scooter instead.
He is also VERY aware that if you borrow money that you pay back more than you borrow, and saves for what he wants.