Loan..quick question

enjoyincubus

loufie88 wrote:

True.. I see your point, but what I'm wondering is, is it the £8,000 that's putting them off and would there be more leeway applying for a £1,000 loan?

That will play a part, but it won't be the only reason.

If it is your age that is putting them off then the loan amount will have no influence. However if they are looking at the affordability of the loan then how much you are borrowing and how much you have left over at the end of the month will play a part - so the loan amount would be a factor.

AMILLIONDOLLARS

Can you get insurance for the type of car you're going to buy? No point buying a car for £8,000 if you can't insurance it and at 18 I suspect you are gonna get clobbered could possibly be in the region of over £3-4,000+, do your research on car insurance groups before you do any borrowing, saves a waste of time and you borrowing more than you need!!

loufie88

The car will cost £1300 to insure which I don't think is too bad for my age!

enjoyincubus

loufie88 wrote:

The car will cost £1300 to insure which I don't think is too bad for my age!

Nah that's not bad, my brother is 18 and I am sure has been quoted over £2000 on an old escort!

My advice would be to get a reasonably cheapish car (£1000-£2000), keep that for a year or two and then get a newer one. £2000 gets you a lot of car these days, I was shocked when I bought mine in February. You won't get any from car dealers for that price as they don't bother selling cars less than £3,000ish due to the low profit margins, so that makes getting finance difficult. Even places like Switch Car (who are a bit crap as their APR is in the high teens) don't sell any cars for less than £3000.

That means you are going to need the cash, or get a personal loan... which brings us back to your original problem! Sorry, it is really a tricky situation to be in!

loufie88

The frustrating thing is that I know I have enough disposable income to afford the payments/insurance/petrol/tax etc. it's just getting someone to believe that! .. I think I'll just find the £1000 deposit from somewhere and get the car on finance, at least that will build my credit rating up... :j

Thanks.

Mark7799

You haven't mentioned the total cost of the car - is it £8k or a higher figure? If you are asking for the full amount of the car, this is more likely to count against you than the actual amount. If you have some money saved and are borrowing the rest, lenders may be more likely to assist, especially if you can prove you have been saving.

Gemmzie

loufie88 wrote:

The car will cost £1300 to insure which I don't think is too bad for my age!

At 17, my first car cost me £1500 and was £849 to insure 3rd party, fire, theft


You're lucky to have a well paid job at this age, but unfortunately, still a risk.


I'd try the contract mobile route, ask for a small overdraft from your bank, wait a few months and get a store card (New Look are quite good at dealing out cards) - spend a little on it each month and repay in full.
It'll improve your credit rating while you save

AMILLIONDOLLARS

loufie88 wrote:

The frustrating thing is that I know I have enough disposable income to afford the payments/insurance/petrol/tax etc. it's just getting someone to believe that! .. I think I'll just find the £1000 deposit from somewhere and get the car on finance, at least that will build my credit rating up... :j

Thanks.

But at what cost? please look at the total cost of the credit, are you planning to have this loan over five years?

having a quick look at the Nationwide website they are doing a loan for £8,000 over 5 years at an Apr of 6.4% if you get that rate of course, total cost of credit with PPI is £11,127.60, without PPI £9,323.80, you'd be 23 by the time you paid it off, how much will the car have depreciated by then? and will you still be wanting to drive around in it? I agree with the others, there are a lot of cheaper cars out there with the Wow factor that can be changed in two years for an uptodate model.

We bought our daughter for her 18th at sporty looking Peugeot 206 for £500, she paid about £900 for insurance, on her 20th, she bought herself a Clio, £2,000 which was written off in an accident, so on her 22nd birthday she went upmarket and bought herself a Sliver Audi, as you can see in a five year period she managed to change her car three times with the Audi costing her about £5,000 last time around. Being on this site I have tried to instill Martins MoneySavings teachings to her, and she did manage to save a large deposit for her last purchase and paid it off using her bonus, I know that this is not possible for everyone, but I feel to saddle yourself with a possible £9,000+ debt at your age is madness, I urge you to please look at other options, I am sure two years down the line you'll be pleased that you did.

Good luck and shop wisely

AMD

mrcow

AMILLIONDOLLARS wrote:

but I feel to saddle yourself with a possible £9,000+ debt at your age is madness, I urge you to please look at other options

:T Thank you for that.

I think it's so easy these days for young people to get into large debt so early on in their careers and they end up paying through the nose. It's makes me so angry that companies will do this (although in this case at least some have turned him down), suck then in early and they'll be in debt for the rest of their lives..........

Loufie88, if you have that much disposable income, take a few months to save up and buy yourself a half decent car. It's so much better in your pocket than some loan company's!