New car - what can I really afford?

[alexyfoot]

Hello guys, I am new to the forum but am looking for some help from the more experienced people in purchasing cars.

To the point - I will be graduating this year from university and having a job that pays something around the 20-21k mark. I would really prefer to have my own vehicle so I am not limited to public transport (which isn't cheap either). From what I calculate, I should be able to afford around 170-180 quid per month for car finance, but I am not sure what that can get me in terms of car price from a dealer - I am 23, student loan (10k), no credit card, always paid my bills and stuff on time so far. What sort of car price range should I be looking at - something like 3-4k mark or something like 7-8k mark would be more realistic (I believe you can get used cars from dealers on lease right?)? Never had any experience with loans, hence why I am asking here.

Cheers.

[BettySwollocks2]

what deposit have you got??

I got a SEAT Ibiza 1.6 SC for 189 pcm with a 2000 deposit 3 years ago. my Fab VRS TSI 180 I have at the moment I only pay 250 pcm with 500 quid deposit and thats a 15k car.... a lot of manufacturers have finance calculators you can use.

ETA: if you have any finance questions PM me as Ive been in finance agreements for 3 years now nearly.

[alexyfoot]

Not fixed but should be able to put up to about 1k I think.

I do know they have calculators - but problem is I don't own a house/mortgage and do have a student loan so I am not sure if I qualify for their offers. I have a feeling if I go for something more expensive I will only keep getting rejected and I will probably need a car almost immediately after I finish university.

[carreauchompeur]

I'd be tempted to get £5k on a personal loan and then find the car you want, not tied to specific dealers/models etc then.

Unless you specifically WANT a brand new car, in which case I would imagine you'd get some great manufacturer deals....

[Captain Muppet]

alexyfoot said:

I will be graduating this year from university and having a job that pays something around the 20-21k mark.

Good luck.

alexyfoot said:

From what I calculate, I should be able to afford around 170-180 quid per month for car finance...

Does that include insurance, tax, servicing and fuel? You can't budget for any of those without knowing which car you are buying, which you can't do before you know what your budget is. I know, not helpful.

[SSBB]

Yes a dealer can arrange finance on a used car for you.

Why don't you try some online loan calculators? Mess around with desposit, payments and term to find something you are happy with. You're a university graduate, I'm sure you'll figure it out!

[alexyfoot]

Captain Muppet - I mean for the car itself, not including the rest of the expenses.

The problem with online calculators is they always assume perfect credit rating I believe, and they presume you can actually get the loan, while I am not sure if I am eligible for more than 3-4k with my background (I think I should be able to get that much at least).

[djglover]

I ran a £900 mk 2 golf gti when I left college. It didn't cost too much to run, did my own oil changes etc. After 3 years it needed £400 worth of welding to get through the MOT so I scrapped it and got £100. Not bad value motoring IMHO

[hornetrider]

Save a few months, buy something for sub £1500 and run it for a year, whilst continuing to save. You can get an awful lot of car for £1500 these days, doesn't have to look like an old shed.

[alexyfoot]

Is there going to be much difference between car insurance for a new eco car (say Kia Rio type of thing) compared to an old 2-3 hatch? This is going to be my first card in the UK (no NCB as where I come from I wasn't on the insurance policy...) - are these old cars more than 1000k to insure for a young driver (23)? I don't want to end up spending 1500 on insurance and at the same time drive a crappy 1999 car that can break down any minute.

Btw, I am not into fast cars and sporty suspension stuff - the more comfortable the interior, the better - so newer eco cars appeal a bit more due to nice equipment that come with them - but again I don't think I can afford one.

http://www.creditplus.co.uk/car-loan-calculator.ht...

On this one 4 year loan, 1k deposit and 7k vehicle returns 185/160 depending on whether I put good or fair credit rating. My guess would be I am somewhere around fair - so 180 quid would work for me. Question now is what's the most comfortable and relatively cheap to insure thing I can get for 7k?

Edited by alexyfoot on Monday 20th February 13:44

Edited by alexyfoot on Monday 20th February 13:48

[RenesisEvo]

anonymous said:

[redacted]

This - totally this.

I was in exactly the same boat as yourself a few years back - graduated, new job (congrats btw), wow - look at all this money! I can go get a brand new car! Having looked at scrappage schemes I ended up financing a ~7k sensible, dull used car over 3 years at roughly £200/month - so similar to what you are proposing.

When I was told I was being made redundant with half the finance term to go, I instantly regretted my decision; it felt like a massive weight around my neck. I was lucky things worked out and I didn't have a break in employment in the end. But you might not be so lucky.

Also, the bit about getting a better car more quickly - I never believed it, but it seems true. I paid the car off a year early and have spent the last 6 months looking at some great things to replace it with - cars I never thought I'd be able to consider after only a few years.

alexyfoot said:

drive a crappy 1999 car that can break down any minute.

My first two cars were older than that! And the second was utterly reliable. Pick the right car on condition and reliability shouldn't be an issue.

Edited by RenesisEvo on Monday 20th February 13:47

[SSBB]

Part of the problem is that we don't know what credit is available to you.

For roughly £175 per month @9.9% over 3 years you are getting about £5500 now.

You should check with your bank and see what they are offering you. This will give you an idea as to what is available.

Unless the car is vital to your work, I would go for a sub £1000 small hatch and pick up something nicer in a year's time.

[alexyfoot]

Well, to be fair my experience is with a 1997 Lancia - so thing don't get any less reliable than that but there was constantly something broken on it - that is why I am not a fan of really old cars. I think I will settle for something in the 2-3k region and try to pay it in an year if possible.

what is BOMAD?

[Captain Muppet]

alexyfoot said:

Captain Muppet - I mean for the car itself, not including the rest of the expenses.

How are you calculating the rest of the expenses of running the car? You can't get insurance quotes or work out the fuel and servicing costs without knowing what car it is.

[alexyfoot]

I have checked some insurance quotes for different cars. I have calculated a roughly fuel bill and tax depending on what I get. Now repairs is big unknown for old cars - so that is very guesstimate-y, but I do reckon I can spend up to about 180 on a car purchase every month based on lifestyle and other expenses I have.

[vrsmxtb]

There's no right or wrong answer to be honest.

If you're going to be earning that sort of money, just have a quick add upof all your constant outgoings per month and factor in how much you'd be happy to spend on motoring. If you're a petrolhead this may be higher than the average joelooking for a cheap reliable A-B transport I get the feeling you're the latter? In which case a nearly new cheap cheerful hatchback on a £1-150p/m finance would be a sound investment - it'd be in warranty and if you choose the car wisely, would give you trouble-free motoring for ages.

However, the usual PH "buy a banger" could work too. Older cars can be just as trouble-free if you choose the right one, and one in the right condition / history. This may be the Petrolhead route as part of the fun is researching different cars, getting to know what to look for and picking something just that bit different. And don't assume old/cheap = massive frequent repair bills. Choose wisely and find a decent local garage and car costs will be massively less than running a financed / main dealer serviced newer car, however bland/cheap.

Insurance-wise it's all pretty arbitrary. A cheap Korean hatch would probably be on average less to insure than something slightly older/cheaper but it all depends how much time/effort you can spend getting quotes. If you find the right broker even something unusual / much higher performance can work out not far off your bog standard hatchback.

Personally, I traded in a perfectly good Y-reg Focus that I had bought outright. It was in immaculate condition and I put a good 50k mileson it in just under 4 years. But I fancied a change so traded it in for peanuts for my current Fabia VRS which I put a decent deposit down on, and went for a 4 year finance to keep the payments manageable. I was very hesitant going the finance route at first, and if I hadn't gone that route I'd be substantially better off and chances are still have a decent working, but high mileage Focus. But I wanted a change, wanted a quicker, newer car and don't regret it. I'd be tempted to change again at the end of this year when my finance is finished, but think I'm going to be sensible and just cut my everyday car costs and keep running the Fabia - especially as I do have another car for fun to run and maintain now and also need to start thinking about boring things like moving out....

Edited by vrsmxtb on Monday 20th February 14:08

[deltashad]

My brother was in a very similar position to you last week. The insurance is going to hit you hard so its better to go for a car around 2005 with relatively low miles to keep the costs down.
We narrowed it down to a Honda Civic Type-S, Ford Fiesta ST and a Mini Cooper/ Cooper S.

He decided on a Civic Type-S. Not the most exciting buy but they are reliable, cheap to run, handle well and look sporty.

I suggest you go onto an insurance comparison website and run through insurance quotes to narrow your choice.
You can also use the comparison websites to get the best deal on a loan, then apply over the internet.

Good luck, buying a new car whatever it is can be great fun.

Edited by deltashad on Monday 20th February 14:05

[Chrisw666]

RenesisEvo said:

anonymous said:

[redacted]

This - totally this.

Very much what they said.

If you own a cheaper car outright you can swap for a different one much easier and much more cost effectively.

[BettySwollocks2]

my advice would be to get a new car with warranty etc than getting a loan out and buying a car and then be responsible for MOT, Repairs etc... especially as you can often swing free servicing these days,

a couple of french manufacturers are doing deals where you get 3 years finance, servicing, insurance, all included in the price

http://www.peugeot.co.uk/finance/finance-offers/ju...

take a look

[Chrisw666]

BettySwollocks2 said:

my advice would be to get a new car with warranty etc than getting a loan out and buying a car and then be responsible for MOT, Repairs etc... especially as you can often swing free servicing these days,

a couple of french manufacturers are doing deals where you get 3 years finance, servicing, insurance, all included in the price

http://www.peugeot.co.uk/finance/finance-offers/ju...

take a look

We've ran 2 cars for a the past year (including insurance and servicing) for less than the monthly payment on a 1.6 207 estate. We still own those cars and just have to add fuel.

Such a premium for a warranty seems bonkers.