Loan for a 22 year old with no credit history

DCFC79

Does he have any savings ?

Earns 24k living at the gf's parents, minimal outgoings so should have a decent amount of savings. If he's wanting to take a loan out he would need to budget for it.

NikNox

No savings to speak of - he's literally got a decent payrise last week. Young baby, buying things for when they move out (hopefully soon) takes its toll on a young mans wages. But, he's much better off as of last week.

Gaz83

Ian_875 wrote: »

With a first car its a balance between getting a cheap car but paying more on insurance every month, or biting the bullet with a slightly more expensive/newer car, and getting lower insurance.

... wait, what?

forgotmyname

When looking for a car for a young newly passed driver i found that having a car that was under 10 years old got cheaper quotes than a 11 year old car.

Nothing to do with the cars value or mileage though.

uncreative

Tell him to:

a) Have a look at the bangernomics thread on here.

b) Start budgeting properly and building up savings (constructive comment, not a dig) - look at spreadsheet budgeting models or something like YNAB. He should get to £1,000 or £1,500 in no time.

c) Open up the Autotrader website and use the search parameters to find cars less than 60,000 miles, within 20 miles of his address for less than £1,500. Sort Highest price to lowest price and work through them. Japanese cars around 05/06 plate with low miles, properly serviced and a recent MOT are a winner in my book.

d) Continue to save and build up a pot of £5k over say the next year

e) Look at reaction when the car bought a year ago is still runnign fine and the £5k car fund becomes redundant as he doesnt want to give up the free motering

marty2be2000

Another tip, do NOT try and apply for to many loans in a short period.

The more he attempts to apply for, the worse it will be come as the credit companies will see him as being desperate for credit and that in itself is a very big negative.

Apply for one or two, and if declined then wait 6 months before trying again. The damage may however already be done, and chances of getting a decent rate loan may already be low.

Vikipollard

NikNox wrote: »

No savings to speak of - he's literally got a decent payrise last week. Young baby, buying things for when they move out (hopefully soon) takes its toll on a young mans wages. But, he's much better off as of last week.

Then he can't know whether he can afford a loan until he is consistently able to save the repayment amount per month, particularly if they are moving into their own place anytime soon and will have significantly higher living costs than at present.

Apologies if I've missed this anywhere, but why has he not applied to his own bank, as they will know his history of financial management? What counts as a high rate of interest as well?

CKhalvashi

Nowt wrong with my 02 plate Focus (which cost me £350 and a few beers).



The advice from me is to get an old Ford, preferably one that is local and cost less than £500, purely because if anything goes wrong with it, there's usually a part in the breakers for it rather than needing to go to a dealer.

Even then, a full brake system on a 'W' reg Focus set my mother back less than £280 this week, using a proper garage and new parts, which would be less than 2 months payments on a £5k loan spread over 3 years.

chanz4

CLAPTON wrote: »

I've never noticed that as my car gets older, the insurance gets much dearer

It is kinda true, I find newer cars are a lot cheaper to insure as parts are cheap to source

CLAPTON

chanz4 wrote: »

It is kinda true, I find newer cars are a lot cheaper to insure as parts are cheap to source

do you have any example of this ?

I'm no expert but I would expect more up to date car parts to eb dearer as they tend to be more complicated

so once you could change a broken wing mirror by buying the glass for a few quid, now you replace the whole unit with its motors and heated glass for £750