New young drivers - second hand car or finance

watfordwend · 10 March 2018 at 12:53PM

Hello,

I was looking for some advice. My 18 year old has finally passed her driving licence and now I'm looking into the next step and are thoroughly confused and would welcome advice for pros and cons.

I know insurance will be astronomical and will shop around but should I outright buy a second hand car, buy a new car using a lease agreement or use a company such as Marmalade to lease a car and get the first year's insurance free. I have read so many mixed reviews for all of these options that my brain has become frazzled....

Please let me know your experiences.

Thanks, Wendy

missile · 10 March 2018 at 1:05PM

A young inexperienced driver is likely to have at least one (hopefully minor) incident where the car is damaged. I would advise you to buy a second hand car.

Surprisingly <LOL> the chances of an incident are much reduced when the young driver buys the car.

System · 10 March 2018 at 4:30PM

watfordwend wrote: »

I know insurance will be astronomical and will shop around but should I outright buy a second hand car, buy a new car using a lease agreement or use a company such as Marmalade to lease a car and get the first year's insurance free. I have read so many mixed reviews for all of these options that my brain has become frazzled....

Please let me know your experiences.

Thanks, Wendy

Well Wendy its like this. In addition to the four figure insurance do you want to be funding the first 2 years of depreciation on a new car which are the most expensive and can easily be 50% of its value? I bought my car at 2 years old for just 1/3 of its new price. If you get a new car on finance or lease a new one you'll be paying for that.

However saying that, Peugeot do "Just Add Fuel" which may be worth looking at as it is 3 YEARS free insurance for up to three drivers however she would have to have a Telematics box fitted. It also includes tax, servicing and breakdown and you could be looking around £250 a month with a £2500 deposit for something like a Pug 108. There is however a fly in the ointment other than you funding the depreciation and that is a 6,667 mile a year limit which is just a little over 120 miles a week so she would have to do no more than 20,000 miles in the first 3 years or there would be a mileage penalty. My son did 20,000 miles in 6 months in his first car.

davidwood681 · 10 March 2018 at 4:42PM

You could teach them a life lesson that will benefit them no end and let them save up and buy their own vehicle. Just a thought.

IamNotAllowedToUseMyName · 10 March 2018 at 5:07PM

Our offspring were put onto our second car, and they didn't get a car until we helped when they moved out (one got the old second car and the other got a cheap Hyundai under warranty).

Car insurance IS confusing and it doesn't help that cheap cars that seem aimed at teenagers work out more expensive to insure. Also, putting named drivers on teenager's policies makes massive difference, and putting a teenager as a named driver on a reasonable car is often not eye watering.

Unfortunately. teenagers are expensive to insure because almost universally they are not very good drivers. So if you have money to burn, and you do the parental bi-monthly iPhone replacement plan for all those lost smartphones, then buy new. Otherwise, I'm in the "make them suffer a bit" camp. With a couple of cars in the family, buying a car almost guarantees there will be one sitting on the drive unused all the time. Save money by being organised.

forgotmyname · 11 March 2018 at 1:24AM

Can they afford the lease and a large increase in premium if they do need to claim?

If not can they afford to pay off the lease in full and hand teh car back?

Finance and large insurance premiums is very risky.

Just had a quick look at the Peugeot one mentiones £360 a month with a £2681 deposit. But when clicking through its £500 deposit and £408 per month. limited to 6667 miles a year.

Insurance premium £218 per month for the 1st year and £7848 over 3 years.. My little ones premium on the 2nd year was £900.

And then there is the telematics. 4 warnings in a year for speed or harsh braking and the insurance will be cancelled. Cannot see the excess for the telematics policy but the standard one is £350 + £500 for those under 25.

Tom99 · 11 March 2018 at 7:28AM

[FONT=Verdana, sans-serif]I would go for 2nd hand as the chances of a ding or scrape are high which is very annoying on a brand new car.[/FONT]

[FONT=Verdana, sans-serif] [/FONT]
[FONT=Verdana, sans-serif]Also at 18 can they afford the depreciation on a new car which will be factored in whether they buy or lease.[/FONT]

fatrab · 11 March 2018 at 8:25AM

Well done to your daughter on passing!

Definitely second hand for the first few years. There's a high chance it will be damaged or mistreated in some way until your daughter learns about the responsibility of running a car and maintaining it. Kerbed wheels, minor bumps, showing off to friends, lack of maintenance - anything is possible. On a "leased" car, any damage will come at a hefty cost.

I went 50:50 with my son on his second car, for every penny he saved I matched it. His first car was a hand-me-down, a 1999 1.0 Corsa from his Granddad which was worth about £500. He had a minor bump when he reversed into a post so that cost him a few hundred quid for a bumper and paintwork. But it lasted him 18 months and he sold it to one of his friends who ran it for a further 2 years! His second car was an Astra 1.8 and he kept it immaculate as he'd learned how to care for a car by then. Unfortunately his 3rd car (A Fiesta ST which was his pride and joy) was written off by a 79yr old who got confused and drove down the wrong side of the road and hit him head on.

He now has a newer Astra Diesel. He's never had car loan, finance or a lease/PCP (and he's terrible with money!)

I hope your daughter enjoys the freedom her licence brings and has a safe future on the road.

Best wishes.

Jimmithecat · 11 March 2018 at 8:46AM

I would definitely go for second hand.

Recently looking for a car for my 18 year old daughter I narrowed the choice down by lowest insurance group. - then looked for one of these cars locally - we found a 5 door Skoda citigo for sale with 23k on the clock - it’s. a great little car.
We took out an admiral multi car policy (this is the 3rd car in the household) with a telematics box for this car, I am named as second driver - this was £500 for this car - with A high excess.

John-K_3 · 11 March 2018 at 9:01AM

If you want your daughter to understand the value of money, and the different options, then gift her the sum you would have spent, and let her make up her own mind.

I think that handing her a shiny new car sends a bad message to an eighteen year-old. That is a good age to start learning that things do not come for free, and knowing that you!!!8217;ve handed over the money, then need to manage the running costs gives an important perspective on cost and value.

GunJack · 11 March 2018 at 11:01AM

Buy cheap used car, but set up an account on confused.com or similar so you can check the insurance before you buy. Did this for Mini-Gun#1 and the choice of car, along with me as named driver, cut his first year insurance by almost £1000.

Avoid corsa, fiesta, etc., usual small cars, as the ins. co.'s load them as they expect young inexperienced drivers to go for them. He ended up with a suzuki wagon R, and he now is about to put it through it's second MoT under his ownership.

...and he's paid for it all himself. £450 for the car, £1300 first year's insurance, and £970 second year with 1 year NCD. 2.5 years of motoring for him for less than the cost of 1 year of lease payments quoted on the Pug deal above...

New young drivers - second hand car or finance

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