Bank loan at 18?

iancrt

dotdash79 wrote: »

You can get a decent car for about £1000 have £1000 for your insurance and have some left over in case of repairs emergency.

Ill be impressed if you get insurance for £1000. My 18 yr old son was quoted £8000 for his at 18 - in a little old group 4 car!
Two years later its down to £1700 in a £500 group 2 car

Don't go monthly either - the interest they charge is stupid!

Tixy

iancrt wrote: »

Don't go monthly either - the interest they charge is stupid!

Some insurance companies 'only' charge around 12%.
Obviously thats not exactly a small APR but is likely to be less than he is able to borrow the money for elsewhere in the situation described.
And 12% repaid in a year is obviously cheaper than paying it over several years.

That said though obviously it would be much better if they can save up enough for a cheap runaround and the insurance before buying a car.

somethingcorporate

Cycrow wrote: »

the mature thing to do would be to not get into debt at 18

^^ this!

The mature thing is staying away from debt at such a young age for something like a car and considering reason when you see it. Not being belligerent and ignoring everyone because you have made up your mind. That is what toddlers do.

sn00kums

Congratulations on passing your test. It's nice to have a nearly new car, but it is also very easy to take for granted. You will always remember your first car for what it represents: freedom, and as a result you probably wouldn't care if it was a bit of a shed - especially when you get your first car park ding or hit your first pothole.

However with £3k saved up you can afford a car that isn't clapped out and doesn't have particularly high mileage. Plus you'll have some money left over to contribute towards the insurance. This would be the sensible and mature option in my opinion.

It seems as though you have the financials planned out, but not being 18 yet and having a new credit file means the banks will treat you like an idiot who has no concept of money unfortunately. It seems harsh, but it's the responsible thing to do. From reading your post it seems that you're an apprentice? Why not wait until you've got your first job as a skilled worker and treat yourself to a newer car then? You can get yourself a credit card in the meantime and work on building the perfect credit rating so that in the future you'll have a solid credit score and be able to apply for a loan if you still want one. Plus if you look after your first car, you can trade it in or sell it.

19lottie82

OP my OH is a mechanic and he says older cars (circa £1000) actually hold their value really well as people always want a cheap run about for that price. Buy one of these (make sure you get some advice from a friend or family member who knows about cars) , keep it for 18 - 24 months and stick what you would have spent n loan repayments, aside, then sell the original car (if you've kept it in good nick you'll prob get your money back) and use the total to upgrade and buy a newer car.

Honestly, even if you do manage to get a loan (I think you will struggle) you do not want to get in to debt at such a young age when you don't NEED to. You WILL regret it. Honestly.

Read the storied on this board. I doubt you will find a single poster who took out debt in their teens and didn't regret it.

worried48

Agreed - get something very cheap, for a few hundred. I know you won't want to hear this but statistically the chances of you getting into an accident are very high (which is why your insurance is so high) and you need to get those insurance costs right down so - cheap group one car, third party only (or third party fire and theft perhaps), drive much more carefully than you want to, and get that no claims bonus next year! Once your no claims bonus starts going up, your insurance costs start to plummet.

19lottie82

worried48 wrote: »

cheap group one car, third party only (or third party fire and theft perhaps).

Oddly enough, third party isn't always cheaper than fully comp, so never just assume it will be cheaper, always double check.

happycamel_2

Your logic that selling a car means you'll get enough to cover outstanding debt worries me. You would be trying to balance a depreciating asset (the car) against an appreciating liability, ie capital plus interest on the debt. Try reading some other threads on car finance to see how many people are left with debt when they try to sell a car they bought with finance.

natnhay

Hi my daughter started with a 1.0L y reg corsa which cost £1000.Her 1st yr insurance was £1300 full comp.Two years on shes upgrading her car and was told by the garage that she would probably get close to her £1000 back for the Corsa if sold privately.So try and find a cheaper car and pay your insurance in full because it can almost double if you pay by installments. Good luck

27col

The idea of paying your insurance via a long term loan is absolutely ridiculous.
Selling the car and expecting the proceeds to cover the outstanding loan is also fanciful to say the least. especially as part of the loan will be for the insurance, and the car will likely have depreciated in the mean time. What you are proposing is a recipe for disaster. Natnay and others are giving good advice, I suggest that you take it. High mileage does not necessarily equate to a banger. It is all about the quality and records of servicing.