Buying a car on finance when young - advice needed!
Discussion
Hello ladies and gents
Im 19 and have been on the road a few months. When i get my 1yncb i want a new/better and more manly car than my x reg yaris... I wanted a new ish fiesta - something like a 11 plate zetec 1.6 td. (Learnt to drive in one)
Obviously finance from a dealership is the way to go but what happens insurance wise?
Thanks
Im 19 and have been on the road a few months. When i get my 1yncb i want a new/better and more manly car than my x reg yaris... I wanted a new ish fiesta - something like a 11 plate zetec 1.6 td. (Learnt to drive in one)
Obviously finance from a dealership is the way to go but what happens insurance wise?
Thanks
Leaving aside the financial suicide that others will warn you off, insurance should be fairly straightforward. Get some quotes. You'll also need GAP insurance which covers the difference in value between the insurance payout and what is owed to the finance co when you inevitably bin it.
Look at it this way. You're 19 now. If you get this car on finance because it's the best you can afford (and the best you can afford to insure) you're more or less stuck with it for three years, paying off finance on a depreciating asset - the most boring variant of a workaday small hatchback.
Were I 19 again I would keep the Yaris, and possibly get something like an MX-5 or a 3-Series BMW for tinkering with. They can be had for buttons these days after all. Treat the Yaris gently and it'll get you to work and back for the price of some tyres for a few years, and then when you can afford it without ruining your life you can trade up into something a bit tasty.
Were I 19 again I would keep the Yaris, and possibly get something like an MX-5 or a 3-Series BMW for tinkering with. They can be had for buttons these days after all. Treat the Yaris gently and it'll get you to work and back for the price of some tyres for a few years, and then when you can afford it without ruining your life you can trade up into something a bit tasty.
Don't do it. I had cars on finance from 19 - 25 years of age and looking back I must've ploughed a fortune into finance, interest etc. I'm 27 now and paid £4k cash for my current runabout. Is it flash? No. Does it do the job? Yes.
I have a decent amount of savings now and it's a good feeling knowing that the spare cash I have means I can add to the pot or treat myself/gf on days out, nice food, holidays etc. I have my own place with a decent amount of the mortgage paid off. The things that matter in life.
Save for a year and get something half decent. Having a flash car may well seem good at your age but trust me, it won't make you 'happy' as you think it will.
Google mrmoneymustache and take heed.
ETA: I'm not a tight arse with money, there are just better things to spend money on than car repayments..!
I have a decent amount of savings now and it's a good feeling knowing that the spare cash I have means I can add to the pot or treat myself/gf on days out, nice food, holidays etc. I have my own place with a decent amount of the mortgage paid off. The things that matter in life.
Save for a year and get something half decent. Having a flash car may well seem good at your age but trust me, it won't make you 'happy' as you think it will.
Google mrmoneymustache and take heed.
ETA: I'm not a tight arse with money, there are just better things to spend money on than car repayments..!
Don't do it! and that's coming from a dealer.
I started getting in to debt when I was around 20/21 and I regret it more then anything else. Before long you'll be using your credit card to fill it up with petrol/service etc. and then in a few years you'll want to move out and won't be able to afford it and you'll be gutted.
Trust me.
I started getting in to debt when I was around 20/21 and I regret it more then anything else. Before long you'll be using your credit card to fill it up with petrol/service etc. and then in a few years you'll want to move out and won't be able to afford it and you'll be gutted.
Trust me.
You'll probably do it anyway, but honestly, the novelty of a modern new-ish car will wear off very very quickly. Sure, the first few months will be lovely, but after a while the stark realization of the amount of money you owe hanging over your head will come to plague you. ~£200pcm payments add up VERY quickly and imagine what setting that side for just a year will leave you. I'm thankfully completely void of any finance for a while now and it feels much better.
And I've been able to enjoy a few budget Porsches, Corrado VR6, some early BMW offerings and a couple of other cheap but interesting stuff, all bought for probably 4-10 months worth of what you might pay on finance. I've just picked up a ridiculously good condition Porsche 924 for £800.
The Yaris might seem boring but stick with it. Put some money aside and buy something interesting in cash. I'm 24 and I estimate I've had roughly £40k worth of borrowed credit since I was 19. In reality I've probably only actually paid maybe 25% of that amount, but it's still a scary figure.
Yeah I know, blah blah boring fart..
And I've been able to enjoy a few budget Porsches, Corrado VR6, some early BMW offerings and a couple of other cheap but interesting stuff, all bought for probably 4-10 months worth of what you might pay on finance. I've just picked up a ridiculously good condition Porsche 924 for £800.
The Yaris might seem boring but stick with it. Put some money aside and buy something interesting in cash. I'm 24 and I estimate I've had roughly £40k worth of borrowed credit since I was 19. In reality I've probably only actually paid maybe 25% of that amount, but it's still a scary figure.
Yeah I know, blah blah boring fart..
Before you make a decision that you'll have to live with for 2-3 years, read this book:
Rich Dad Poor Dad
It'll only take about a week to read, which is less than 1% of the time you'll be paying off your debt. Then once you've finished it, if you still think it's a good idea, go for it.
Rich Dad Poor Dad
It'll only take about a week to read, which is less than 1% of the time you'll be paying off your debt. Then once you've finished it, if you still think it's a good idea, go for it.
Haha - I spent my yoof smoking around in £200 - £500 cars until I got a bit more settled and opting for a £7k bank loan to purchase my V6 406 coupe!
Many happy years driving around with surfboards and moutain bikes on the roof, which were worth at least 4 times more than the car I was carting them around with!!!
If like me, you are happy to accept that you will need to get the spanners out regularly to keep the banger on the road, then go for it. It's a good education in diagnosing what the new clonking / ticking / grinding noise is coming from.
If you're not like me and don't want the hassle of something old and unreliable, then go for a modern car, but make sure you compare the dealer's finance offer with other financing options in the market to make sure you are getting the best deal.
Many happy years driving around with surfboards and moutain bikes on the roof, which were worth at least 4 times more than the car I was carting them around with!!!
If like me, you are happy to accept that you will need to get the spanners out regularly to keep the banger on the road, then go for it. It's a good education in diagnosing what the new clonking / ticking / grinding noise is coming from.
If you're not like me and don't want the hassle of something old and unreliable, then go for a modern car, but make sure you compare the dealer's finance offer with other financing options in the market to make sure you are getting the best deal.
My biggest reservation about that would be that 3 years is a long time when you're 19.
If you plan on staying in the same job and the payments are manageable then it's an affordable way of getting a decent car. But if you want to go to university, go traveling or otherwise change direction over the period of the finance then it's a bit of a hassle, and you will probably lose a fair chunk of cash.
If you plan on staying in the same job and the payments are manageable then it's an affordable way of getting a decent car. But if you want to go to university, go traveling or otherwise change direction over the period of the finance then it's a bit of a hassle, and you will probably lose a fair chunk of cash.
Depends how much your earning and how stable your job is, my advice would be (if you have a stable well paid job) to get a bank loan over 2 years but get something cheaper too, you dont need an 11 plate.
At your age I got a 2yr bank loan and bought a 4 year old 1.0ltr seat arosa, I had a very stable job and was paid about average, I was living at my parents and giving them money for board.
Id be looking at spending no more than 1/3 of my monthly wages on a car (loan+insurance+petrol to work+(1/12*(road tax+MOT+servicing))
What about a 2008/2009 Fiesta?
At your age I got a 2yr bank loan and bought a 4 year old 1.0ltr seat arosa, I had a very stable job and was paid about average, I was living at my parents and giving them money for board.
Id be looking at spending no more than 1/3 of my monthly wages on a car (loan+insurance+petrol to work+(1/12*(road tax+MOT+servicing))
What about a 2008/2009 Fiesta?
Edited by Odie on Wednesday 10th July 09:57
Edited by Odie on Wednesday 10th July 09:57
Laughingman21 said:
Before you make a decision that you'll have to live with for 2-3 years, read this book:
Rich Dad Poor Dad
It'll only take about a week to read, which is less than 1% of the time you'll be paying off your debt. Then once you've finished it, if you still think it's a good idea, go for it.
What he said. Rich Dad Poor Dad
It'll only take about a week to read, which is less than 1% of the time you'll be paying off your debt. Then once you've finished it, if you still think it's a good idea, go for it.
I read this book ten years ago and I don't think it is an exaggeration to say that I am tens of thousands of pounds better off as a result. It's simple stuff that no one ever tells you.
If you want an 11 plate Fiesta go for it, however as others have said 3 years is a long time to own a car and you may want to look at how much 4-year old equivalents are to give you an idea of the depreciation you'll suffer. It's also worth looking on Moneysupermarket and the like to get an idea as to finance rates that are available.
If I was in your shoes I'd be looking for something more like this- running costs may be more but that'll be offset by the fact that you're not paying a bank a chunk of cash every month. Depreciation will be negligable and values may even go up. Plus compared to a Fiesta it'll be much more fun!
If I was in your shoes I'd be looking for something more like this- running costs may be more but that'll be offset by the fact that you're not paying a bank a chunk of cash every month. Depreciation will be negligable and values may even go up. Plus compared to a Fiesta it'll be much more fun!
If you're going to do it my advice would be get something at least 3 years old, which will have suffered most of its depreciation already.
Only go ahead if you're prepared to keep the car for 3 to 5 years and use it to build up your no claims bonus'.
If you think you'll get bored of the car and trade it in sooner than 3 years then don't do it! This is where most people get stung. They can afford the payments, but get bored and then trade the car in for so much less than they bought it for (especially if they buy brand new), but still have a hefty loan withstanding. They then have to options; they either take another loan out to get the car that they want on top of the old loan and therefore end up consolidating the overall costs into 2 payments or one big loan, or they end up with something else that they probably added more cash to buy!
I did what you did at age 23, but I kept the car for 4 years and cleared the loan in 2.5 years. I bought a much older car with low mileage and in very good condition, but I got what I wanted, with the spec I wanted and the cheapest bank loan I could at the time.
Only go ahead if you're prepared to keep the car for 3 to 5 years and use it to build up your no claims bonus'.
If you think you'll get bored of the car and trade it in sooner than 3 years then don't do it! This is where most people get stung. They can afford the payments, but get bored and then trade the car in for so much less than they bought it for (especially if they buy brand new), but still have a hefty loan withstanding. They then have to options; they either take another loan out to get the car that they want on top of the old loan and therefore end up consolidating the overall costs into 2 payments or one big loan, or they end up with something else that they probably added more cash to buy!
I did what you did at age 23, but I kept the car for 4 years and cleared the loan in 2.5 years. I bought a much older car with low mileage and in very good condition, but I got what I wanted, with the spec I wanted and the cheapest bank loan I could at the time.
ben_h100 said:
Don't do it. I had cars on finance from 19 - 25 years of age and looking back I must've ploughed a fortune into finance, interest etc. I'm 27 now and paid £4k cash for my current runabout. Is it flash? No. Does it do the job? Yes.
I have a decent amount of savings now and it's a good feeling knowing that the spare cash I have means I can add to the pot or treat myself/gf on days out, nice food, holidays etc. I have my own place with a decent amount of the mortgage paid off. The things that matter in life.
Save for a year and get something half decent. Having a flash car may well seem good at your age but trust me, it won't make you 'happy' as you think it will.
Google mrmoneymustache and take heed.
ETA: I'm not a tight arse with money, there are just better things to spend money on than car repayments..!
Pretty much same here. Had some nice cars when I was younger (CTR, S2000 etc), financed. Could easily afford it, but looking back how much I paid in interest / depreciation, I do cringe a bit, but then again, I don't regret it. I had fun while I was young, although it cost me!I have a decent amount of savings now and it's a good feeling knowing that the spare cash I have means I can add to the pot or treat myself/gf on days out, nice food, holidays etc. I have my own place with a decent amount of the mortgage paid off. The things that matter in life.
Save for a year and get something half decent. Having a flash car may well seem good at your age but trust me, it won't make you 'happy' as you think it will.
Google mrmoneymustache and take heed.
ETA: I'm not a tight arse with money, there are just better things to spend money on than car repayments..!
Now at 29, I smoke around in an old £900 Volvo 940 that refuses to die and having the spare cash in the bank is just as satisfying
Gassing Station | Finance | Top of Page | What's New | My Stuff