Graduate Seeking Advice on Car Finance Options

aero_oli

I’m recently out of university and in need of some advice on car finance options. Here’s a brief rundown of my situation:
I just graduated from university and I have a graduate job confirmed that starts in September. The job thankfully comes with a £30,000 salary. I have already signed the contract, so that's non-negotiable. However, in the gap between now and September, I technically fall into the bracket of being unemployed.
The problem is that I will need a car before I start the job, both for commuting purposes and for the move itself. Therefore, I am considering financing a used car to fulfill this need. However, given the fact that I don’t start working till September, I’m unsure about my options. I don't want to make a mistake that could later affect my credit or financial stability adversely. 
Can anyone advise me on what my options might be, given my circumstances? Any advice would be greatly appreciated!
Thanks in advance!

CliveOfIndia

First question - do you have sufficient savings to be able to buy a cheap runabout?  If so, that is undoubtedly the most financially prudent option.  There's absolutely no need to be spending tens of thousands on a car, it's perfectly possible to pick up a decent little car for a couple of thousand or less, even given the current high prices of used cars.

Aside from that, you may find your options are fairly limited given that you're technically unemployed.  A personal loan may be an option, but you may find it hard to get accepted for one at anything approaching a reasonable rate of interest.

If you're buying from a garage/dealer, they may offer finance options.  It's more common on new cars than used cars, but the upside is that the finance would be secured on the car, so there's slightly more chance of being accepted (on the theory that if you miss payments they can simply repossess the car).

You could potentially look at a money transfer credit card - but again, whether you'd manage to get one is uncertain.

But really, I think any sort of finance may be tricky for someone in your situation - buying something you can afford from savings would be absolutely the best option, if possible.

Grumpy_chap

aero_oli said:

I’m recently out of university and in need of some advice on car finance options. Here’s a brief rundown of my situation:
I just graduated from university and I have a graduate job confirmed that starts in September. The job thankfully comes with a £30,000 salary. I have already signed the contract, so that's non-negotiable. However, in the gap between now and September, I technically fall into the bracket of being unemployed.
The problem is that I will need a car before I start the job, both for commuting purposes and for the move itself. Therefore, I am considering financing a used car to fulfill this need. However, given the fact that I don’t start working till September, I’m unsure about my options. I don't want to make a mistake that could later affect my credit or financial stability adversely. 
Can anyone advise me on what my options might be, given my circumstances? Any advice would be greatly appreciated!
Thanks in advance!

Will you be enjoying this long summer, travelling, etc? (and there is no reason why not)
OR, will you be seeking stop-gap summer job?

Do you have any savings available?

If you can buy a car that does not require finance, that will be your best option - something that will last you through the first year of employment and then take stock at that time at what type of car you need to meet your requirements.  If you then decide to go for a more expensive car on finance, you will at least be doing so with a clear understanding of your budget and available funds plus the year of work history will mean you become a more attractive prospect for the finance company.

Do you have any plans to get on the housing ladder?  Don't get a good car that then reduces your chances of getting the house you want.

Congratulations on graduating and securing a "proper" job

Ryan_Holden

Buy a cheap car outright, you don't want to be in debt before you've even started a job.

If you got finance while unemployed I'd think that's madness on the lenders part.

MrFrugalFever

I wouldn’t propose you to a lender if you told me you were unemployed as it would be a waste of both our time, however, if you had a regular income from say benefits, you could potentially gain access to credit through a small panel of lenders.

If you have savings then I would look at a cheap runner until you pass probationary period, then you could consider a finance application. However, modt lenders require a minimum of 3 years worth of employment history.

Herzlos

Can you hire a van to do the move, then make do with public transport for a few months before applying for a car loan?