Best First Time Car Finance

Fredlett

Hello,

I'm looking for a bit of advice on first time car finance, I hope someone can advise.

My Stepson is 21 and has no real credit history as he's never had finance before and possibly a bit of a black mark for paying some utility bills late in a flat he rented with some friends 18 months or so ago.

He has a well paid job working in London but as we live out in the sticks he has a 20 mile each way commute to the train station each day and his car is on it's last legs.

He works long hours and earns well and needs to finance a new (used) car but everywhere he has tried including his bank have turned him down flat for a loan, the only place that offered him finance was a high interest rate HP deal at a car supermarket..... But the amount he would have paid back was ridiculous.

He's pretty impatient to get something and as the dutiful stepdad I'm trying to find out if there are any recommended lenders for this type of situation, I realise he won't get a great interest rate but I would like to try and help him sort something reasonable out before he goes headlong in to getting ripped off and has to spend the next 5 years or so regretting it.

Any suggestions would be gratefully received, thank you.

rising_from_the_ashes

I'm afraid he may struggle - especially if he's not got any proven record of paying things back

A couple of questions to check out with him

- is he on the electoral roll
- is the amount he's thinking of borrowing realistic when compared % wise to his salary
- what other commitments does he have
- how many applications has he already made? (if several and all declined then he really needs to wait a bit before trying again)

Gaz83

If he has a well paid job working in London, what kind of savings does he have?

dealer_wins

Gaz83 wrote: »

If he has a well paid job working in London, what kind of savings does he have?

At a guess sod all LOL

Ilona

dealer_wins wrote: »

At a guess sod all LOL

Don't be so rude, and don't make assumptions before you know the facts. As a first time poster the OP deserves more respect than that.
Ilona

clayton16749

If he does earn well - and presumably still lives at home - now is the time to save his money.

Herzlos

Gaz83 wrote: »

If he has a well paid job working in London, what kind of savings does he have?

This was my first thought; you can get a pretty good commuter car for £1000* these days and avoid paying extortionate amounts on finance, then save up for something nicer.

*You can get much cheaper as well, but realistically that involves more research.

If he really must borrow, and has no option but huge rates, you can either let him do that, or borrow on his behalf with the caveat that he might not pay you back.

Fruit_and_Nut_Case

Ilona wrote: »

Don't be so rude, and don't make assumptions before you know the facts. As a first time poster the OP deserves more respect than that.
Ilona

The OP may gain more respect if he ever comes back to respond to the questions he's been asked.

dealer_wins

Ilona wrote: »

Don't be so rude, and don't make assumptions before you know the facts. As a first time poster the OP deserves more respect than that.
Ilona

My assumptions are right more times than you have had hot dinners!!

So dont be rude to me and dismiss my correct assumptions you rude goose!!

ultimatefighter

I work in the auto industry and deal with this a lot. We have a lot of 21-25 year olds who are starting out.

Car manufacturers finance eg BMW, Mercedes and VW tend to have reasonable rates but don't approve on rate. They either say yes or no. I work with underwriters a lot and hear the same things.

Your son will want a car but not to get ripped off royally with 10% flat rates (20%apr). Electoral roll is a must for sur 10k borrowing. If he has missed some bills it may not affect his credit or overview if in general behaviour has been positive. If he has defaulted and not satisfied I wouldn't expect any reasonable lender to say yes. Especially in mortgages.

County court judgements are also an instant no. If he can't pay for everything else why would he pay for a car?

They may also ask for 3 months bank statements and payslips to ensure imminent behaviour is also positive and that your son isn't living "on the edge" of life (overdraft).

Also don't buy from car giant or car craft if he wants something decent stock wise. Avoid super markets. Buy from reputable dealership. A lot more money is spent on preparation and warranty covers.

Fredlett

Thank you for all your replies and suggestions,

And to the poster who commented about 'gaining respect if i ever reply', for some reason I have been having log in issues on my ipad so it wasn't for the want of trying, just couldn't get on!

In answer, he's a fairly typical 21 year old who's suddenly earning good money. No, he doesn't have any real savings and like most young blokes he wants a nice car so he won't be buying a £1000 commuter/banger I fear (that is what he currently has).

He is on the electoral roll so maybe that will help and i take on board the advice regarding visiting dealerships as opposed to car supermarkets.... Good advice and i will try and steer him that way although to get the sort of thing he's after I expect he will end up going the car supermarket route as main dealers prices will probably be too high for him.

I guess what I have been looking for ( but it would appear I'm not going to find ) is a lender that would consider him without ripping him off on interest to try and steer him towards.... but ultimately he will do what he wants and it sounds like his options will be limited.

Thanks for the advice offered, we can but try!