£20k Car @ 21

LiamTLOU

Hey guys,

I've been trying to work out for the past few days if I can afford to get myself a Seat Ateca FR on finance. I earn £34500 yearly, and my outgoings per month is £1269 on rent and other finances (this includes food, fuel and insurance) leaving me with £1000 per month to spend.

I own a 15 plate Ford Fiesta at the moment, and am due to pay this off by December this year. I want to have saved £5k by January next year, and sell my Fiesta for £3000. Meaning I'd have £8000 to put towards a £20k Seat Ateca. That would leave £12k to pay off, and I would get a 48 month repayment plan, and if I'm extremely lucky find that exact car on a 0% finance plan (unlikely but who knows...).

0% finance would mean I'd be paying £250 a month, when at the moment I'm paying £200 for a Ford Fiesta.
10% APR on finance would mean I would pay £300 a month, 15% being £328 being £100/£128 more than what I am paying now, so it seams reasonable?

I managed to pay my Fiesta off without an issue, and since then my salary has gone up by £10k, so salary being relative and all that, my outgoings will go up too... Seeing as I am looking at a more nice car. I do a lot of driving, and while my Ford is reliable and definitely sensible, it's really boring to drive....

I'm sure the fuel and maintenance cost will go up with an Ateca, but still within something I can afford.

Because I am young, I can only assume I am naive (reason for adding my age to the title), but when trying to work this out, it seems very much possible, so long as I get a nice deposit put down on the car.

Is there something I am missing when it comes to financing a car at £20k or, from what it seems, should I be fine?

loskie

keep the fiesta, wait till you are 25+ and the insurance drops quite a bit. Save your money for the inevitable mortgage.

Sea_Shell

Have you done any insurance quotes yet???

parking_question_chap

All too often I hear the question "can I afford it?", when the more important question is "is it worth it?"

If you dont own a property and want to replace your current PCP car with a newer PCP car, then you are doing it wrong.

Get the house, get the mortgage paid off and then think about getting a really enjoyable car.

Scrapit

Sounds like you've done the maths. Check against what a dealer will actually offer you and see what you think. If all good then crack on.

missile

Do you dream of owning a Seat Alteca FR? really ….

Live a little. Get your self a second hand sports car and enjoy it whilst you are still young.

Robby1988

At age 21, you are in a very good spot with £5k tucked away in savings and (as of December) an outright owner of a 4 year old car.

I really can't fathom why on earth you would want to blow all that and then get yourself into 4 years of £250pm debt over a pretty uninteresting SUV you will get bored of. I'd keep the Fiesta going and try and use the extra £200pm you will have in your pocket to address the £1269pm rent burden you have got by trying to raise funds for a mortgage deposit.

Plenty of time in life for a bloody Seat Alteca if thats your dream.

System

LiamTLOU wrote: »

I managed to pay my Fiesta off without an issue, and since then my salary has gone up by £10k, so salary being relative and all that, my outgoings will go up too... Seeing as I am looking at a nicer car.

Congratulations you've fallen straight into the lifestyle inflation trap. Earn more money so start buying more expensive stuff and sit there at the end of every month wondering why when you earn £10k more than you used to you're still completely skint with nowt in the bank waiting for payday to come.

Herzlos

Why a Seat Ateca? It's a lot of money for a pretty average car. A Leon or Cupra FR, fair enough.

That £250/month is better spent or either something more practical or more fun.

Sea_Shell

Something to bear in mind...When I was 21 my car was worth £1000 tops, a 1.3 Mk3 Escort.

Roll forwards 26 years, I am now Mortgage Free and looking to Retire shortly. The most we've ever spent on a car was £13,000.

But as they say, each to their own and all that.

The decisions you make in your 20's can make big differences in your 40's & 50's. Don't fall into the "have it all now" trap. Life whizzs by so fast, and you too will be 40 before you know it. It's just a question of whether your 40 year old self will thank you for the decisions you make today.

AdrianC

Your thread title undersells it - the FR starts at £27k. By putting your £8k cash in, you'll be borrowing £19k of that £27k, then repaying £12k of the borrowed money... with nothing to show at the end of four years. You just hand them the keys and walk away.

So including the £8k cash, it will cost you £20k over four years - £415/mo, amortising your £8k cash over the four years - to rent a Golf-on-stilts for... what, 8k miles/year? 32k miles in total? 62p/mile just to rent the car. Fuel and insurance and maintenance and tyres on top. That's going to be costing you at least 80p/mile, probably nearer 85p/mile all in. Maybe even 90p/mile, depending on how steep your insurance is. Plus any excess mileage or condition costs on return, of course.

Yes, of course you can afford £5k/year on £35k salary, £27k after tax etc. But do you REALLY want to be spending nearly a fifth of your income on just renting a car? Nearly half of your disposable income.