Car on finance

BrookesAndrew

Hi there,

I want to get a car on finance. I am 19 years old, earn 15k a year. I have two phone contracts, a credit card which I never missed a payment on. I would say my credit files are looking pretty good. Never missed a payment on anything.

What are my chances on getting accepted? I don't want an amazing car. I would just like to know what time of car I can get. There is a 9k Peugeot that looks quite good but am I likely to get accepted?

Any advice would be brilliant.

Thank you,
Andrew

gilbert_and_sullivan

Don't do it, that's my advice.

Please feel free to ignore, but remember it when you haven't got two ha'pennies to scratch your backside with yet those monthly payments (including interest thats keeps people on £1.5million a year in range rovers racehorses and trophy wives) just don't stop going out.

worried_jim

This will be a life's lesson for you Andrew, one that most of us have been through. A shiny new car is brilliant but after paying for one you'll probably find that you wont do it again for may years(if ever again). There are so many great value second hand cars out there and you could get a cracker for well under £2k without the hassle of all that depreciation.

Do your sums carefully and weigh up the pros and cons. Good luck and happy motoring whatever you choose.

enjoyyourshoes

Hi

Proabably need to start saving rather than burden self with high interest, high repayment unsecured load.
Also its not just the car your having to spend on, insurance (DONT GO FOR MONTHLY PAYMENTS as they will charge you 15-39% interest on top!), road tax, tyres, repairs, breakdown cover, MOT etc.

You can save 50-60% of your take home pay of £1096.
Put it in a high interest account (check out MSE bank accounts & savings accounts)
Pay in the £650+ per month
Get the benefit of compound interest
After 12 months you'll have the £8-9K you will need
Cash buyer, you can negotiate A BETTER DEAL
Save for the insurance so you can pay upfront and save the crippling credit charges
Then continue to save 50-60 % salary whilst you are living at home, because then you will want a mortgage (thus deposit)
Start a pension too 5-10% salary saved NOW, again get into the habit of saving for you future.

How to manage your finances :-

, 1. Have a clear objective (specific, measurable, achievable, realistic & time-bound)

2.Understand your total annualised costs & savings (to meet your objectives) (i.e. do a budget or similar) & ensure this is LESS than incoming money. (if not do a review to allocate LESS than income)
(DONT forget to include Christmas, Holidays, Birthdays, Savings, clothes etc as well as the boring stuff)

3. Break budget into two part (part one: monthly costs) (part two: 1/4ly ; 1/2LY & annualised bills. This annualised £'s should be divided by 12 to produce a monthly cost to save for these bills. Can do a cash flow to ensure monthly savings pot has enough £ to pay allocated Bills on the estimated months they become due)

4.Produce a monthly reconciliation which has your income LESS all your costs (including the monthly savings described above), Cash withdrawals, monthly DD & SO, cheques cashed, credit card purchases & savings (linked to your objectives). Do this reconciliation daily and ensure you spend LESS than income.

5. If you dont deduct credit card payments off your monthly income then you will not have the £'s to repay and thus end up in DEBT.

5. Put your monthly savings into a high interest account and track allocated savings against costs. Also DONT PAY insurances by monthly credit agreement pay them annually.

6. Get online access for your current and other accounts so you can see your separate reconciliation is accurate and moving monies is less hassle on line

7. Produce Excel docs to assist

JustinR1979

I see lots of young people in shiny new cars, just don't get it.
I'm in an old banger, but it's paid for - money goes on paying for my house.
On your wage, with contracts and credit cards, why take more monthly payments out of your limited free cash?
Buy a car for a couple grand

Herzlos

How much can you realistically afford to be paying out every month whatever happens?

In your position, I'd be looking at something for half of that (you can get some nice cars for £4k, or even £2k), and saving up for a nicer car when your insurance won't be so horrible.

jimjames

BrookesAndrew wrote: »

Hi there,

Any advice would be brilliant.

Thank you,
Andrew

Can't add much more advice to that already given apart from agreeing with suggestions not to do it.

How much do you have in savings already? Do you have an emergency fund already saved up?

jaydeeuk1

At your age don't do it. I've bought a new car again, but I've done it with my eyes wide open as I wanted a nice new shiny car and not 2nd hand. I'd never spend more than 5% of my monthly income on a 3 year car finance deal though

Also never seen the phrase 'peugeot' and 'looks good' together but there we go.

BeenThroughItAll

enjoyyourshoes wrote: »

Cash buyer, you can negotiate A BETTER DEAL

I'm not going to argue with the sentiment, i.e. save and buy cash, and don't be a fool with your money; but I will point out that cash buyers are in no way guaranteed to be able to negotiate a better deal. Far from it, in fact, most dealers will be much happier to do a deal if you're taking out their finance.


Better advice would be to take out the finance to get the best deal, then pay it off in a lump sum as quickly as you can to reduce interest paid using the cash you would have used to purchase.

greensalad

Buying a 9k car seems ridiculous on a 15k wage. I was earning 22k and bought a £600 car and even that seemed a bit steep.

heartbreak_star

Did you pass your test then OP?

HBS x