Loan for my dream car at 18!

joshross306 · 13 July 2018 at 11:03AM

I've been driving my little Honda Civic for the past year and finally coming up to that mighty 1 years of no claims bonus, ace!

I've been paying for my insurance monthly which started at £143 a month and ended up at over £200 a month. This is due to the current wave of "safe driver telematics boxes" which are a HUGE SCAM. But it was all I could get.

Anyway I've been saving up for something with a little more personality, being a car guy I've always believed life's too short to drive boring cars. And my original choice is way too old to be driving everyday. After all it is a classic now (1993 Toyota MR2 SW20 GT T-bar).

That's when I stumbled across the possibility of buying one of my dream cars. A 2013 Subaru BRZ also known as the GT86 or FRS. The car is £8995, I have around £1500 to put towards it upfront. I also have enough saved on top of that to pay the insurance for the year (Roughly £1000 which is £1000 cheaper than the civic) rather than monthly. The road tax is only £6 a month more than I pay now. My current car and the BRZ also get similar MPG aswell!

The problem:
I have little to no credit history, I have a gym membership, phone contract and obviously the insurance I've been paying monthly for the past year to back me up. Where should I go for a loan this size? I will be trying my bank (Barclays) as they do loans and I think I may have a better chance with them.

The biggest advantage is for me, If I got this loan my outgoings would be lower than they are now paying my current car bills and I'd have my dream car at 18? Surely that's worth it.
In regards to depreciation, I would imagine the car to drop a further £3500 during the loan (5 years) which is fine. Cars are a passion for me not just a utility.

Any advice would be appreciated!

MallyGirl · 13 July 2018 at 11:34AM

do you earn enough to support a loan of this size?

jimbo26 · 13 July 2018 at 11:41AM

joshross306 wrote: »

I've been paying for my insurance monthly which started at £143 a month and ended up at over £200 a month. This is due to the current wave of "safe driver telematics boxes" which are a HUGE SCAM. But it was all I could get.

More likely to do with your driving, your post smacks of boy racer, and the fact your insurance has gone up with a black box supports this view. I have two daughters both had black boxes, one drove sensibly and actually got money back, the other drove badly and paid more. Sensible daughter now pays a lot less for her insurance with a nice NCB, the other daughter is still paying 1,000's a year with no NCB, and six points on her licence.

As you are someone who has a less than ideal driving style I would recommend keeping a cheap reliable car, which if it gets a knock, it won't really matter. If you buy an expensive rear wheel drive car it will end up in a field or the barriers of your local McDonald's.

I suspect you will disagree and go ahead anyway, so make sure you take out GAP insurance to cover the finance shortfall when the car is written off.

foxy-stoat · 13 July 2018 at 11:42AM

Your 18 and the insurance is £1000 for a BRZ? At least you have "dream" in the title of this thread.

Wish you all the best of lucks.

Sncjw · 13 July 2018 at 12:24PM

I would just continue to save as your going to be paying more for the car than it!!!8217;s worth due to interest.

MEM62 · 13 July 2018 at 1:09PM

joshross306 wrote: »

I've been driving my little Honda Civic for the past year and finally coming up to that mighty 1 years of no claims bonus, ace!
Well done! :-)

I've been paying for my insurance monthly which started at £143 a month and ended up at over £200 a month. This is due to the current wave of "safe driver telematics boxes" which are a HUGE SCAM. But it was all I could get.
Scam? How so? As I understand it, drive cautiously and your premium is lower than it would be if you drove like a right flange.

Anyway I've been saving up for something with a little more personality, being a car guy I've always believed life's too short to drive boring cars. And my original choice is way too old to be driving everyday. After all it is a classic now (1993 Toyota MR2 SW20 GT T-bar).
It's also too short to spend years paying off a car that you will become bored with quickly. As a self-confessed 'car guy' you are likely to become a serial car buyer so you will want to change your car more frequently than most. You won't be able to if you have years of payments left on the last one. Depreciation for you guys is bad enough so don't add high amounts of interest to your losses.

That's when I stumbled across the possibility of buying one of my dream cars. A 2013 Subaru BRZ also known as the GT86 or FRS. The car is £8995, I have around £1500 to put towards it upfront. I also have enough saved on top of that to pay the insurance for the year (Roughly £1000 which is £1000 cheaper than the civic) rather than monthly. The road tax is only £6 a month more than I pay now. My current car and the BRZ also get similar MPG aswell!
How much do you save each month? When you have shiny car syndrome of course it is affordable - it always is! If you do not have considerably more cash left over at the end of the month (the day before payday) than the payments would cost you it is not affordable. And what about your reserves for repairs and mechanical failures. Subaru's are not known to be purchased and driven gently by little old ladies. They are ragged on a regular basis and you can expect things to be worn out.

The problem:
I have little to no credit history, I have a gym membership, phone contract and obviously the insurance I've been paying monthly for the past year to back me up. Where should I go for a loan this size? I will be trying my bank (Barclays) as they do loans and I think I may have a better chance with them.
No, the problems is not enough money in the bank.

The biggest advantage is for me, If I got this loan my outgoings would be lower than they are now paying my current car bills and I'd have my dream car at 18? Surely that's worth it.
Ask yourself that question when you are missing nights out with your mates and holidays because you are paying for your car. It will happen.
In regards to depreciation, I would imagine the car to drop a further £3500 during the loan (5 years) which is fine. Cars are a passion for me not just a utility.
Depreciation in the least of your worries.
Any advice would be appreciated!

Advice? Easy - you cannot afford it.

DCFC79 · 13 July 2018 at 1:13PM

Another similar post to 1 what was posted recently. Do parents not give kids the advice that's needed.

My advice OP is to save and use your own money, you will cherish it more plus you won't be paying more than the amount you borrowed.

DrEskimo · 13 July 2018 at 1:19PM

As a general rule of thumb, I am apposed to borrowing money to spend on a car, but especially if the APR is high. There is 'good debt' and 'bad debt'. A mortgage or a student loan I consider 'good debt' (generally), car loans are firmly in the 'bad debt' territory...!

However, my advice would be to work out what the best loan you can get, and what that monthly payment will be. Then diligently put that money away in a regular savings account (might as well try for one with a high interest return if possible) for at least a year.

See how you get on budget wise with that amount of income taken away. If in a years time you still think it's a good idea, then great news, you have a greater amount saved, so can borrow less, the prices of the car will be lower, and your insurance will be cheaper!

If you struggle, even better news! You have saved money and importantly saved yourself from a possibly catastrophic financial error early in your life!

jimbo26 · 13 July 2018 at 1:20PM

Maybe they did. Both my kids got the same advice. One took it on board, one didn't. You can only offer advice.

Nasqueron · 13 July 2018 at 1:57PM

You pay £2400 rather than £1716 due to driving like a dingus (note, it's not a scam, you are told up front that you will pay more if you drive badly) for an old Civic. With 1 years no claims and at 18 you reckon you will only be paying £1000 to cover a 5 year old high spec sports car. Yeah somehow I doubt that. Can the kids go back to school soon?

joshross306 · 13 July 2018 at 2:12PM

jimbo26 wrote: »

More likely to do with your driving, your post smacks of boy racer, and the fact your insurance has gone up with a black box supports this view. I have two daughters both had black boxes, one drove sensibly and actually got money back, the other drove badly and paid more. Sensible daughter now pays a lot less for her insurance with a nice NCB, the other daughter is still paying 1,000's a year with no NCB, and six points on her licence.

As you are someone who has a less than ideal driving style I would recommend keeping a cheap reliable car, which if it gets a knock, it won't really matter. If you buy an expensive rear wheel drive car it will end up in a field or the barriers of your local McDonald's.

I suspect you will disagree and go ahead anyway, so make sure you take out GAP insurance to cover the finance shortfall when the car is written off.

I appreciate your concerns on this matter but from a very young age I've been around high horsepower, typically RWD cars. I myself have had an E36 BMW 323i with a 2.8 conversion as a track day car. I am well aware of the risks and dangers of driving RWD yet have found it much more pleasurable than typical FWD.

The dreaded 'Blackbox" is offered by my insurer Ingenie. These have a terrible reputation I was unaware of. They increase premiums for no apparent reason. I have contacted them several times on the matter and their simple answer is my driving is "inadequate"?

People are too quick to assume age = driving skill this is NOT the case. Look at the British Drift Championship. A 16 year old is currently ranking high in a 600 horsepower S13 Silvia!

I will admit that too many people my age are being idiots on the road and it's led to simple minded folk like yourself jumping to the conclusion that all young car enthusiasts or "boy racers" as you call them are alike.

PS. Not a massive fan of McDonalds anyway

Loan for my dream car at 18!

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