Loan for a 19 year old

duggankieron

First time poster here, so please bare with me.
I am about to move into a new job and my monthly income would be around £1200.
I am looking to treat myself to a new car. The car I am looking at is around £8000, however because of my small credit history and low credit score (even though I have a Gym membership, a phone contract and among other monthly contracts), however when it comes to applying for a loan, the interest just from around 3% to sometimes up to 22%. Is there any way around the stupidly high interest?

P.S. Please don't suggest that a 19 year old doesn't need a £8000 car, I know I don't, but I want it.

[Deleted User]

With a low income, limited employment history and a thin credit file, you're going to be paying a lot of interest.

You're high risk at the moment, so let time do it's thing while you get a credit card and demonstrate some good behaviour and it'll also give you a chance to save as well.

madvicker

Trust me, you might want that car now but every month you pay out the loan for it (as % interest will be high with a limited credit history) you will regret it and resent the monthly payments. Especially if the payments are a large proportion of your income.

Even if you got the best rates (which you won't), you'll be paying £140 a month for a 5 year loan. You're probably looking at £180ish. And don't forget, in 2-3 years time you will likely want a better car.....

If you need a car, that is different and there are some very good cars you can get for £3000. If you really want a nice car, get a cheap one now - save the rest of the money. Then when you have saved enough, sell the cheap car for a bit of a boost to your finances and buy the car outright.

LadyDee

Good grief! No wonder half the population is in debt. £1,200 is not a lot of income to support much of a lifestyle for a 19 year-old. You'll probably find you can hardly afford to put fuel in it, and it'll only be worth peanuts in a couple of years when you are still paying for it. Insurance? For a 19 year-old?

madvicker

LadyDee wrote: »

Good grief! No wonder half the population is in debt. £1,200 is not a lot of income to support much of a lifestyle for a 19 year-old. You'll probably find you can hardly afford to put fuel in it, and it'll only be worth peanuts in a couple of years when you are still paying for it. Insurance? For a 19 year-old?

I moved to the UK at 18, got my first car here at 25. Even then, with my wife on my insurance (she's older and been driving for about 10 years by that point) my first year's insurance was £1800. Now after 3 years it's £360. Hate to imagine what the OP's insurance will be with a flash car.... XD

OP - I forgot about that, you'll be paying an extra £200ish a month just for the insurance with a nicer car. Possibly more...
Straight away, with maybe £150 for fuel you're spending £530ish a month. Nearly HALF YOUR INCOME.

foxy-stoat

Any loan with a rate close to double figures is too much interest.

Just throwing it out there - you cannot afford a car for £8000, you may want one but you cannot afford it at the moment on your income or credit history.

Now thats out the way - choose a car you can afford, job done!

[Deleted User]

foxy-stoat wrote: »

Now thats out the way - choose a car you can afford, job done!

What sort of crazy talk is that?!

MEM62

duggankieron wrote: »

Please don't suggest that a 19 year old doesn't need a £8000 car, I know I don't, but I want it.

Of course you want it. That's understandable at your age.

However, can I invite you to work out how much that £8K car would cost you over the life of the loan. Let's be generous and assume that you can afford the running costs. You then need to take the amount of interest you are paying on the loan and add it to the amount by which the value of the car will depreciate over the loan term - that is the real cost to you. Work that out and, if you as still happy with what the car will actually cost you and

1) You are not going to regret all the other things that you are not going to be able to do (holidays, leaving home, adventures with your mates) because you are making payments on the car.
2) Have a plan for what happens when you loose your job and are trying to make payments on a car that you cannot sell because it is in negative equity.
3) If the car has a major failure you are happy to have it sitting on your drive with you unable to use it because you cannot afford the repairs.

then go ahead.

foxy-stoat

Deleted_User wrote: »

What sort of crazy talk is that?!

Thinking outside the box

jimbo747

I want it all and I want it now. No wonder Brexit is going tits up.

Jockeyjames

There isn't a way around the high interest rates - it's down to the risk factor you present to the lender. As a 19 year old on £1200/mo with a few commitments already, they are looking at it as "if you REALLY want the money, you're going to have to pay for it."

However, saying all that.... I done the same at your age for £5000 on an A3. So do what you want, just play it smart