Car Finance or Loan for 20y Old

dgets94

Hi All,

I have been looking at purchasing myself a new car (Vauxhall Astra, 1year old). I have been to a dealership and have found some suitable ones around the £13,000 mark.

I appreciate that given my age and lack of any finance in the past (other than a phone contract) it is going to be difficult to get finance or a loan.

I have been in full time employment for just over 2 years with the same employer and am earning about £16,000 per year.

I would also have a deposit of £5000 that I can put down towards it.

The dealer seemed pretty confident that I would be able to get finance on the car, maybe requiring a guarantor.

I understand that waiting until I could afford the full amount would make sense, however my current car is well past it's usable life and as i am doing 16,000 miles per year, feel that getting something new and economical would be a sensible option.

Does anyone else have experience of financing a car in a situation like this and would you have any advice?

Many Thanks

[Deleted User]

My advice would be to buy a car for £5k or less. To spend almost a year's gross salary , even before interest, on a car is madness.

A 5k car will last you for some years.

BillJones

dgets94 wrote: »

Hi All,

I have been looking at purchasing myself a new car (Vauxhall Astra, 1year old). I have been to a dealership and have found some suitable ones around the £13,000 mark.

Wow, seriously?

A quick check on Autotrader shows 2 year old ones with under 20k miles from £6,000, and 1 year old ones from £7,500.

£13,000 is ludicrous for a used Astra. Brand new ones are available from under £11,000.

dgets94

I have seen ones for less, but I'm looking at one of the 2.0 diesels as my driving is 90% motorway and it also had a special seat (AGR ergonomic) as I do suffer from a back problem.

I'm cautions about getting another cheap car as I want something that I can see keeping for 6-7 years to come.

Thanks

stalkah

Have you also considered insurance? My wife had trouble getting insured on my 2ltr Diesel Mondeo until she turned 25.
Personally I would say buying a car around £4k with £1k as repair fund will see you through a few fair years as long as you ensure it's serviced correctly

lulu_92

My OH is 30 and he has just this second been approved for a loan to buy his next car. We're thinking along the lines of a Honda Civic but the monthly repayments on the loan were far cheaper than a finance deal.

The interest on the loan is 4.3% yet a finance deal at our local garage had an interest rate of 20%!

dgets94

I have already looked up the insurance and have been quite surprised. it is just over £1000, i'm going to be paying £800 to insure my 1.3 60hp car!

I think that the finance from the garage would be a better choice? Does the car act as collateral? I don't know how likely I am to be approved on a loan with not much credit history.

Thanks

stalkah

What rate finance are they offering? It won't hurt to check if you can get better elsewhere especially as there are lenders (Nationwide) who can perform a "soft search" where by it won't effect your credit score to find out.

dgets94

I think the finance rate they said i could expect was about 10%, which i didn't think was too bad given my age. I will check the nationwide one and see what they say.

Thanks

iolanthe07

The interest on the loan is 4.3%

That might be a flat rate quote. APR will be around 10% if it is. Still much better than 20%, but make sure you are comparing like with like.

somethingcorporate

You'll regret it when you grow up a bit.

Spending such a silly amount on a car (a whole years wages) is insanity at such a young age. You'll be paying this off for 4-5 years after you've grown bored of the car.