21 year old - new car & finances advice
Discussion
Hi everyone,
I'm here to ask for financial advice on buying my next car. Before I do that, here's some context:
I'm a 21-year-old and in my final year of university. I drive a MK2 Leon and due to my usage (going into Europe 3 times now etc) it's really high mileage. It's also very modified, and I don't expect to get a return on my investment. Breaking the car myself eventually would not be possible due to space+time.
I landed a decent graduate job next year that will bring me around £48-49k pretax in a city that's quite cheap to live in. I have no intentions of buying a house in the near future.
When I start this job later this year - I want to buy myself something more powerful. I did some research into leasing, PCP and HP. As well as just buying cash used and I'm daunted...
I don't have much savings but it would definitely cover any deposit up to around 15-20% value of cars I'm looking at.
Cars I considered were a Golf R, Cupra, or an M140i. The latter has a high insurance quote at the moment.
What would be the best approach in my situation? Or am I just dumb and I shouldn't be thinking above throwing money into a depreciating asset?
Thanks.
I'm here to ask for financial advice on buying my next car. Before I do that, here's some context:
I'm a 21-year-old and in my final year of university. I drive a MK2 Leon and due to my usage (going into Europe 3 times now etc) it's really high mileage. It's also very modified, and I don't expect to get a return on my investment. Breaking the car myself eventually would not be possible due to space+time.
I landed a decent graduate job next year that will bring me around £48-49k pretax in a city that's quite cheap to live in. I have no intentions of buying a house in the near future.
When I start this job later this year - I want to buy myself something more powerful. I did some research into leasing, PCP and HP. As well as just buying cash used and I'm daunted...
I don't have much savings but it would definitely cover any deposit up to around 15-20% value of cars I'm looking at.
Cars I considered were a Golf R, Cupra, or an M140i. The latter has a high insurance quote at the moment.
What would be the best approach in my situation? Or am I just dumb and I shouldn't be thinking above throwing money into a depreciating asset?
Thanks.
creesteN said:
flight147z said:
Buy a house first
Standard answer but it's the right one
I don't plan to stay in one city/country at the moment. I'm expecting to be moving jobs probably around every 24 months. Does this advice still stand?Standard answer but it's the right one
not sure a BTL is such a good idea at the mo, especially as you've not got the money to buy one anyway
for me a striking a balance, by all means buy the car you want but do that along side saving a house deposit and building a pension pit, especially as you'll likely be a higher rate tax payer before long... wise i'd started my pension contribs at 21!
Nano2nd said:
not if its a house you're going to live in, buying/selling takes time and is very expensive... not something that fits in with moving every 2 years.
not sure a BTL is such a good idea at the mo, especially as you've not got the money to buy one anyway
for me a striking a balance, by all means buy the car you want but do that along side saving a house deposit and building a pension pit, especially as you'll likely be a higher rate tax payer before long... wise i'd started my pension contribs at 21!
My employer will be matching my private pension contributions up to 10% of my monthly salary pre-tax, so I'm definitely maximising that! I guess I'll have to settle and buy cash for a reasonable amount of money once I get more savings. not sure a BTL is such a good idea at the mo, especially as you've not got the money to buy one anyway
for me a striking a balance, by all means buy the car you want but do that along side saving a house deposit and building a pension pit, especially as you'll likely be a higher rate tax payer before long... wise i'd started my pension contribs at 21!
creesteN said:
I don't plan to stay in one city/country at the moment. I'm expecting to be moving jobs probably around every 24 months. Does this advice still stand?
At your age then I would buy something rather than lease and start saving.Then in a couple of years you could have something much nicer - neither of the cars you have suggested are particularly special, just quick. Once you get used to the power it will be just like driving any other hatchback.
If you are planning on moving to another country I wouldn't get stuck with a lease
Personal opinion here, but I'd stick set yourself a decent budget, probably around 6-8k, and find something you like in there. You can get plenty of great cars for that. It also depends on how you're gonna use the car, is it weekends and personal time only, will you be using it for the commute or for business?
I'd also get a lifetime ISA set up ready for when you do make a house purchase. If it's going to be in London (I'm assuming not as you said you're going to move) then you'll need a huge amount. Get a minimum of 15k saved up for a house deposit, just leave it there ready for when you do want a place of your own.
I'd also get a lifetime ISA set up ready for when you do make a house purchase. If it's going to be in London (I'm assuming not as you said you're going to move) then you'll need a huge amount. Get a minimum of 15k saved up for a house deposit, just leave it there ready for when you do want a place of your own.
I financed a 17.5k car at 19 on hire purchase.
If I was you I'd get a well specced late model 17/18 M140i. Look after it, don't skimp and you shouldn't lose a huge amount depreciation-wise as long as you don't overpay. The replacement model is going to be 2L 4 cylinder and 4wd, so there should be a demand for the current model still.
I'm also looking to change at the moment as was weighing up the R and M140, did you mean that the R is better insurance wise? I'm finding it to be marginally more expensive than the BMW.
If I was you I'd get a well specced late model 17/18 M140i. Look after it, don't skimp and you shouldn't lose a huge amount depreciation-wise as long as you don't overpay. The replacement model is going to be 2L 4 cylinder and 4wd, so there should be a demand for the current model still.
I'm also looking to change at the moment as was weighing up the R and M140, did you mean that the R is better insurance wise? I'm finding it to be marginally more expensive than the BMW.
Hammy98 said:
I financed a 17.5k car at 19 on hire purchase.
If I was you I'd get a well specced late model 17/18 M140i. Look after it, don't skimp and you shouldn't lose a huge amount depreciation-wise as long as you don't overpay. The replacement model is going to be 2L 4 cylinder and 4wd, so there should be a demand for the current model still.
I'm also looking to change at the moment as was weighing up the R and M140, did you mean that the R is better insurance wise? I'm finding it to be marginally more expensive than the BMW.
Why not consider an M235i or M240i too if those are the types of cars of interest. Bit more special but I guess they cost a little more than the equivalent 1 seriesIf I was you I'd get a well specced late model 17/18 M140i. Look after it, don't skimp and you shouldn't lose a huge amount depreciation-wise as long as you don't overpay. The replacement model is going to be 2L 4 cylinder and 4wd, so there should be a demand for the current model still.
I'm also looking to change at the moment as was weighing up the R and M140, did you mean that the R is better insurance wise? I'm finding it to be marginally more expensive than the BMW.
IMO I would opt for a low rate personal loan or even a 0% credit card if you can get one and buy outright a car.
Any form of lease or finance can be very constraining and costly if you need to hop abroad for a few months or a year and you need to get rid of the car - it may not be on the horizon right now but opportunities present themselves when you least expect and plan, its good to be dynamic to a situation if it arises especially where you are in your career!
A lot of people say don't rack up large amounts of debt on a car buy a house first, I think a better way of looking at is to balance saving with expenditure.
This is a bit leggy on the mileage and I only use AC website as I had it open already, but this is a fair bit of bang for your buck!!
https://www.arnoldclark.com/used-cars/porsche/caym...
Insurance now that's another matter!
Any form of lease or finance can be very constraining and costly if you need to hop abroad for a few months or a year and you need to get rid of the car - it may not be on the horizon right now but opportunities present themselves when you least expect and plan, its good to be dynamic to a situation if it arises especially where you are in your career!
A lot of people say don't rack up large amounts of debt on a car buy a house first, I think a better way of looking at is to balance saving with expenditure.
This is a bit leggy on the mileage and I only use AC website as I had it open already, but this is a fair bit of bang for your buck!!
https://www.arnoldclark.com/used-cars/porsche/caym...
Insurance now that's another matter!
flight147z said:
Why not consider an M235i or M240i too if those are the types of cars of interest. Bit more special but I guess they cost a little more than the equivalent 1 series
The fact that the M2 exists puts me off - weird reasoning I know.With a 2er I'd always wish I waited and got an M2. I'm also one of the odd few people who actually like the shape of the 3 door 1 series. The 2s are nice cars though!
creesteN said:
CastroSays said:
Can you tell us what first degree gets you a job with a starting salary of £48-49,000 in a city outside London?
Just curious.
Computer Science at a top university. I'm also one of the 'lower' salaries out of my very intelligent peers.Just curious.
Not sure why you are looking at family type cars. At your age I was going for two seaters. Making assumptions, but you will have a lifetime of hot family wagons ahead of you where the option of a two seater may not be an option.
On that very decent wage, I would be looking at a Z4M Coupe, Elise or something of a similar ilk.
No way would I spend £20k+ on a quick family hatchback. IMO, that is not intelligent despite what your higher education certificate may proclaim
Mike
On that very decent wage, I would be looking at a Z4M Coupe, Elise or something of a similar ilk.
No way would I spend £20k+ on a quick family hatchback. IMO, that is not intelligent despite what your higher education certificate may proclaim
Mike
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