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  • FIRST POST
    • duggankieron
    • By duggankieron 6th Jul 18, 9:29 AM
    • 6Posts
    • 0Thanks
    duggankieron
    Loan for a 19 year old
    • #1
    • 6th Jul 18, 9:29 AM
    Loan for a 19 year old 6th Jul 18 at 9:29 AM
    First time poster here, so please bare with me.
    I am about to move into a new job and my monthly income would be around 1200.
    I am looking to treat myself to a new car. The car I am looking at is around 8000, however because of my small credit history and low credit score (even though I have a Gym membership, a phone contract and among other monthly contracts), however when it comes to applying for a loan, the interest just from around 3% to sometimes up to 22%. Is there any way around the stupidly high interest?

    P.S. Please don't suggest that a 19 year old doesn't need a 8000 car, I know I don't, but I want it.
Page 2
    • Caz3121
    • By Caz3121 6th Jul 18, 4:13 PM
    • 11,436 Posts
    • 7,489 Thanks
    Caz3121
    @duggankieron:

    You have 2 scenarios to choose from:

    (1) Take out a 8k loan say over 5 years to keep the monthly payments small against your salary. You'll between 3.4% with a major high street bank.
    Originally posted by bd10
    Not sure if you missed it in the first post but OP is getting offered at 22%
    • tonycottee
    • By tonycottee 7th Jul 18, 1:02 AM
    • 1,123 Posts
    • 2,120 Thanks
    tonycottee
    I bought a car for 6k at 19 and I was earning far less. I loved the car, it was an important lesson in budgeting and I suffered no ill consequences.

    I would love to jump on the shocked/disgusted bandwagon, but I just can't.
    • Edi81
    • By Edi81 7th Jul 18, 6:47 AM
    • 528 Posts
    • 483 Thanks
    Edi81
    You would be better looking at hire purchase. Negotiate with the dealer and watch out for flat rate interest - ask about the apr. Don!!!8217;t accept anything over 10%.

    As other posters have already said how much savings are you putting away, what is your rent? You should be able to save up a good chunk of this in less than a year. What!!!8217;s the rush? You!!!8217;ve got your whole life ahead of you for fancy cars!
    • Tarambor
    • By Tarambor 7th Jul 18, 9:10 AM
    • 3,539 Posts
    • 2,610 Thanks
    Tarambor
    Remember that 8000 finance over 5 years you get now is going to impact how much money you have to live on if you wish to leave home any time in the next 5 years. It also means that you're effectively "stuck" in your current job because if you leave dole money won't cover it and if you don't pay then the ramifications for that could knacker your life until you're nearing 30 years old.
    • Pixie5740
    • By Pixie5740 7th Jul 18, 9:23 AM
    • 12,907 Posts
    • 18,536 Thanks
    Pixie5740
    P.S. Please don't suggest that a 19 year old doesn't need a 8000 car, I know I don't, but I want it.
    Originally posted by duggankieron
    Then you probably shouldn't post your question on a website dedicated to money saving. Every penny you pay in interest is you stealing from your future self.
    • Puddylove
    • By Puddylove 7th Jul 18, 11:13 AM
    • 494 Posts
    • 824 Thanks
    Puddylove
    Buy a banger or 'shed' as I believe they are called.
    It'll be cheap, you won't care if someone hits it with their shopping trolley, or scrapes by on a country road. It won't get stolen. Many 19 year olds have accidents (I wrote off my first car at 17yrs) and you won't mind so much with an old car - but do make sure it's safe.
    View it as a test run while you hone your skills and save up for the car of your dreams, not just the 8k one.
    • DCFC79
    • By DCFC79 7th Jul 18, 11:43 AM
    • 32,543 Posts
    • 20,476 Thanks
    DCFC79
    Can your parents not help out with some of the money and you top it up with some savings once you have saved some.


    If you want it this badly then save up for it.
    • sourcrates
    • By sourcrates 7th Jul 18, 11:48 AM
    • 15,238 Posts
    • 14,335 Thanks
    sourcrates
    P.S. Please don't suggest that a 19 year old doesn't need a 8000 car, I know I don't, but I want it.
    Originally posted by duggankieron

    When i was 18, i saw a gorgeous sunshine red Ford Capri 2.0 on a local garage forecourt, it was 1750.


    At the time i had a 1977 Lincoln green Ford Fiesta Mk1, which was an old shed, but was the first car i`d bought for cash, about 200 quid if i recall, but i soo wanted that Capri, didn't have the money though, and in 1985 1750 was a lot of money for an 18 year old on about 50 a week wages.


    So i got it on credit, and it was the start of my love affair with cars, but also the start of my life in debt, for the next 30 years, ultimately ending in insolvency more than once.


    Now I realise you cannot tar everyone with the same brush, but I look back on that car purchase as the start of all my financial woes, not been able to go out as much as i liked, not been able to go on a trek to the US with my mates, as i had the car to pay for, I know things are different nowadays, but you really do not want to be in that much debt at such a young age.
    Last edited by sourcrates; 07-07-2018 at 2:16 PM.
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    • Rosemary7391
    • By Rosemary7391 7th Jul 18, 12:10 PM
    • 2,193 Posts
    • 3,720 Thanks
    Rosemary7391
    I hear you that you want this car. If you work out how much it will cost you per month - get insurance quotes, loan quotes and work out fuel + an allowance for repairs, you could try saving that amount of money per month for 6 months to a year. Then you'll have a better credit history (so would get better loan quotes) and need to borrow less, plus you'll know how it is to live off that amount of money.



    That said - I do wonder how you'd manage to pay rent and bills, insurance and a car loan on 1200. I was on a similar income and I couldn't see how to do it even with buying a car outright from savings. If you're not currently paying rent/bills - you should probably check with whoever is whether they mind subsidising your car or if they're expecting you to save up and move out.
    Slinkies 2018 Challenge - 0/80lb lost
    • mitch2509
    • By mitch2509 7th Jul 18, 1:39 PM
    • 41 Posts
    • 57 Thanks
    mitch2509
    I wish I'd had this advice when I was 18! Listen to these guys they know what they're talking about!
    Debts at LBM (June 18):-

    Capital 1 - 413.46 Vanqqquis - 1676.43,First D Visa - 1578.73, Next - 2083.12, TSB - 5326.59,Barclaycard - 5195.01, Capital one me - 1359.99, Loan - 5702.31, Loan - 2739.99, Total 26,075.63
    • beckysheffield
    • By beckysheffield 7th Jul 18, 1:47 PM
    • 231 Posts
    • 30 Thanks
    beckysheffield
    First time poster here, so please bare with me.
    I am about to move into a new job and my monthly income would be around 1200.
    I am looking to treat myself to a new car. The car I am looking at is around 8000, however because of my small credit history and low credit score (even though I have a Gym membership, a phone contract and among other monthly contracts), however when it comes to applying for a loan, the interest just from around 3% to sometimes up to 22%. Is there any way around the stupidly high interest?

    P.S. Please don't suggest that a 19 year old doesn't need a 8000 car, I know I don't, but I want it.
    Originally posted by duggankieron
    What about leasing? 300pm around about and includes ainsurance
    • Loanranger
    • By Loanranger 7th Jul 18, 1:56 PM
    • 2,130 Posts
    • 5,622 Thanks
    Loanranger
    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
    • By iolanthe07 7th Jul 18, 3:26 PM
    • 5,064 Posts
    • 4,750 Thanks
    iolanthe07
    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
    • By robber2 7th Jul 18, 5:29 PM
    • 355 Posts
    • 300 Thanks
    robber2
    300pm around about and includes insurance


    Probably won't include insurance for a 19 year old. There are usually age restrictions.
    Originally posted by iolanthe07

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



    Rob
    • bd10
    • By bd10 7th Jul 18, 6:00 PM
    • 29 Posts
    • 10 Thanks
    bd10
    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
    • By hugheskevi 7th Jul 18, 6:44 PM
    • 2,031 Posts
    • 2,542 Thanks
    hugheskevi
    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
    • By zagubov 7th Jul 18, 7:32 PM
    • 15,503 Posts
    • 131,845 Thanks
    zagubov
    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.
    There is no honour to be had in not knowing a thing that can be known - Danny Baker
    • Crumble_
    • By Crumble_ 8th Jul 18, 7:31 PM
    • 57 Posts
    • 9 Thanks
    Crumble_
    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
    • By Candyapple 9th Jul 18, 1:38 PM
    • 2,943 Posts
    • 2,288 Thanks
    Candyapple
    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
    • By foxy-stoat 9th Jul 18, 1:55 PM
    • 2,642 Posts
    • 1,523 Thanks
    foxy-stoat
    I dont think the OP is coming back!
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