Car Finance

Shaun_of_the_Dead

You don't need to spend £15-18k to get something to do the job.

DrEskimo

Have you worked out how much this would cost you?

The loan itself will be in the £300/month region, so how much will the petrol, insurance and maintenance/servicing going to set you back each month?

I wouldn't be surprised if it ends up being around +£500. How will you budget for food, toiletries, going out, books for your course, things you want, things you want to buy for others, haircuts, etc etc.?

Alexhat

Shaun_of_the_Dead wrote: »

You don't need to spend £15-18k to get something to do the job.

Thats why I said in one of my previous comments "an upgrade since I drive a lot"

Alexhat

DrEskimo wrote: »

Have you worked out how much this would cost you?

The loan itself will be in the £300/month region, so how much will the petrol, insurance and maintenance/servicing going to set you back each month?

I wouldn't be surprised if it ends up being around +£500. How will you budget for food, toiletries, going out, books for your course, things you want, things you want to buy for others, haircuts, etc etc.?

I have taken the time to work out all of this, with a large deposit it should be around £200-£250 per month for the car and it is around £1000 per year for insurance. I should be able to afford it, i just was not sure if i would even get finance without a job.

DrEskimo

Alexhat wrote: »

I have taken the time to work out all of this, with a large deposit it should be around £200-£250 per month for the car and it is around £1000 per year for insurance. I should be able to afford it, i just was not sure if i would even get finance without a job.

It wouldn't surprise me if you could get secured finance from a dealer even without a job, but I would hope you couldn't. A guarantor loan is a terrible idea for the person guarantying the loan. They are responsible for the loan and end up getting a horrendous APR if you no longer service it. They are better off taking out a loan themselves at a better rate and then asking you to send the payment each month to them. If they really care for you, they would never agree to it....

£13k over 36months is £361.11 before you even add interest. a guarantor loan will cost you a fortune in interest. Were you thinking of going for a 5yr loan? What happens when the car has a major repair? How will you pay for it, another loan? What about fuel, servicing and maintenance? You seriously want to be living on less than £50 a week?

Stick with your current car and put the excess money away in a saving accounts. You have plenty of time to enjoy nice cars when you get a job.

Ectophile

Nobody is going to lend you the money until you have a steady job. If you're unemployed, you would fail the affordability test immediately. They certainly won't be impressed if your only source of income is student loans, which will stop the moment you leave university.



Any loan that requires a guarantor will have a high interest rate. That's assuming you can find anybody stupid enough to sign as a guarantor*.


If you really must buy an expensive car, wait until you have a job with a good income. Until then, consider replacing your old car with a slightly less old one, if you really have to.



*Being a guarantor is a mug's game. The guarantor takes on all the risk of the loan, but gets no benefits from it.

Alexhat

DrEskimo wrote: »

It wouldn't surprise me if you could get secured finance from a dealer even without a job, but I would hope you couldn't. A guarantor loan is a terrible idea for the person guarantying the loan. They are responsible for the loan and end up getting a horrendous APR if you no longer service it. They are better off taking out a loan themselves at a better rate and then asking you to send the payment each month to them. If they really care for you, they would never agree to it....

£13k over 36months is £361.11 before you even add interest. a guarantor loan will cost you a fortune in interest. Were you thinking of going for a 5yr loan? What happens when the car has a major repair? How will you pay for it, another loan? What about fuel, servicing and maintenance? You seriously want to be living on less than £50 a week?

Stick with your current car and put the excess money away in a saving accounts. You have plenty of time to enjoy nice cars when you get a job.

Thank you for answering the question, i suppose i would be better off.

Scrapit

Alexhat wrote: »

Because at the moment i am getting £2700 every 3 months so that works out at around £900 a month.

So you would be using a student loan to pay a car loan. Can you see why that wouldn't be a great idea?

Alexhat

Scrapit wrote: »

So you would be using a student loan to pay a car loan. Can you see why that wouldn't be a great idea?

It would be paying debt with debt so i can see how it wouldn't be the best idea,

DrEskimo

Alexhat wrote: »

Thank you for answering the question, i suppose i would be better off.

I would love for you to have a nice £15k car to drive around in, but unfortunately you just aren't in the position to make that sort of large financial purchase, and it would mean making massive sacrifices as well as putting you at very high financial risk.

One of the issues with these decisions is that we never see what the struggle could have been had we done them, all we know is we aren't getting the rose tinted visions we had of owning those things we really want (or think we want in a lot of cases....). I've been there, I got a ridiculously expensive car, and whilst I was fortunate in that it didn't impact me financially that much, I still look back on it as one of the stupidest things I've done. A whole lot of wasted money and nothing but a fleeting memory of a car...

Now I take much greater pride in being financially comfortable with no debts and get far better satisfaction from the wealth I'm able to build as a result. Concentrate on your studies and your career goals as they will bring you far more fulfillment out of life. Nice cars can come later as a consequence of that.

Wishing you the best of luck with it all :beer: