Loan for a 19 year old

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  • Loanranger
    Loanranger Posts: 2,439 Forumite
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    You don't need a car. You will soon discover you are going to work to pay for the blooming thing.

    Meanwhile, save as much as you can and feel smug while you travel by bus and look out of the window at the idiots who are paying through the nose while not being able to find a parking space.
  • iolanthe07
    iolanthe07 Posts: 5,493 Forumite
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    £300pm around about and includes insurance


    Probably won't include insurance for a 19 year old. There are usually age restrictions.
    I used to think that good grammar is important, but now I know that good wine is importanter.
  • robber2
    robber2 Posts: 558 Forumite
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    iolanthe07 wrote: »
    £300pm around about and includes insurance


    Probably won't include insurance for a 19 year old. There are usually age restrictions.


    £300pm will probably just about cover the insurance and nothing else



    Rob
  • bd10
    bd10 Posts: 347 Forumite
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    If the interest rate would indeed be at subprime level, say at 23%, boy, ... that's over 6k interest alone for a 8k loan or monthly a bit over £200. Then add insurance say £300 plus whatever petrol use, the odd MOT, maybe some repair or maintenance. Income tax is low, so net around £1,100 pcm. Half of net salary just on the car??? Never mind food, rent and other expenses, not counting on any emergencies/rainy days??!?

    The only thing I can recommend is to forgo the car on credit, to establish a proper credit profile and just save, save and again save. Once the OP reached the point in his career/income to be able to spend £8k in cash and without feeling it in his wallet, or impacting his lifestyle in any way, then maybe get the car. And by then as it was previously said, a new more fancy one will have come along.
  • hugheskevi
    hugheskevi Posts: 3,858 Forumite
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    One thing I wish I'd appreciated better when I was young was the number of big expenses that would need funding throughout the coming decades, namely (not all will apply to everyone of course):
    • University expenses
    • Student loan
    • Travel
    • Rental deposits
    • Rent
    • Council tax
    • House deposit
    • Mortgage
    • House repairs and maintenance
    • Car
    • ISA saving
    • Child costs
    • Pension
    • Care costs for dependents (parents, but could be others)
    • Provisioning for funding care home in the future
    I spent a lot of money on a fast motorbike at a similar age - fun, but a waste. There were many big-ticket items ahead the money would have been far better spent on. Now I could buy any car (within reason) I like for cash, but still only spend about £4,000 on a second-hand car every 7 years or so - other priorities from the list above are more important to me.

    Still, it is good to have fun. But borrowing to fund the above (aside from house purchase and student loan) just makes everything significantly more expensive. Far better to build a secure financial position and then pay far less for everything by buying it however is optimal (usually buy outright, but not always). When that isn't possible and the spend is necessary, best to minimise costs so as to be able to get to a position where it is possible as soon as you can.
  • zagubov
    zagubov Posts: 17,886 Forumite
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    The only way to avoid high interest is to save and buy outright. Either way you've got less money for other things.

    There's the added bonus that the saving route will give you time to rethink the whole idea.
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  • Crumble_
    Crumble_ Posts: 59 Forumite
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    I an guessing a £8,000 Car is not a high insurance cost if the car is brand spanking new. Insurance obviously depends on years driving and claims.

    If the car is not brand new for £8,000 maybe look at an older version with moderate miles.

    Or there might be some 0% Car deals out there on pcp over 3-5 years that take your fancy?
  • Candyapple
    Candyapple Posts: 3,384 Forumite
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    Life lesson on car finance:
    http://forums.moneysavingexpert.com/showthread.php?t=5746050&highlight=lesson
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
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    I dont think the OP is coming back!
  • Icarus01
    Icarus01 Posts: 46 Forumite
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    That's probably going to take a third of your wages when you factor in insurance too.



    I was in a similar situation you find yourself in: 18 and I got a loan for £6000 over 4 years (18% iirc) to buy a nice Honda. I found after less than a year I was bored of the car, and after 2 I was looking to part ways with it, but selling it wouldn't even pay off the remainder of the loan. I didn't think at the time about rent/holidays/general living expenses as I was living at home, but when I decided I wanted my own place that big monthly bill for finance and insurance really didn't help at all.


    I get it though, you want a nice car.. who doesn't? It's just something you really need to think about. Given another chance I wouldn't have gone through with it
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