What can I afford?
Discussion
Hey folks,
After some years of being a student and riding motorbikes, I have grown up and just got a big boy job in engineering.
It's getting closer to winter and I will soon have some pennies to stop my balls from freezing and I need some advice on what I can afford.
I'm 24yrs old (25 in November if that makes a difference to insurance)
My new job earns me circa. £25k per year
After tax and various expenses, I have about £400 a month to spend on a car
I have no savings and no money in the bank and to be honest I've never had any money so I don't really know how to handle it.
My mission is to get a fun car (Preferably RWD) before winter, by which time I will be 25 and have a few £k in the bank
So far I have been looking at Mk 2 MR2s and older 3 series.
I have now realized that with my relatively healthy monthly income, I can probably expand my options beyond eBays cheapest and cheerfullest.
I know nothing about leasing, finance, bank loans, pcp stuff so I don't really know my financial positioning in the car market.
Would I be better off getting a bank loan and spending £4-5k on a younger, lower mileage model?
Can I afford leasing and get something fun?
Any advice is most welcome!
After some years of being a student and riding motorbikes, I have grown up and just got a big boy job in engineering.
It's getting closer to winter and I will soon have some pennies to stop my balls from freezing and I need some advice on what I can afford.
I'm 24yrs old (25 in November if that makes a difference to insurance)
My new job earns me circa. £25k per year
After tax and various expenses, I have about £400 a month to spend on a car
I have no savings and no money in the bank and to be honest I've never had any money so I don't really know how to handle it.
My mission is to get a fun car (Preferably RWD) before winter, by which time I will be 25 and have a few £k in the bank
So far I have been looking at Mk 2 MR2s and older 3 series.
I have now realized that with my relatively healthy monthly income, I can probably expand my options beyond eBays cheapest and cheerfullest.
I know nothing about leasing, finance, bank loans, pcp stuff so I don't really know my financial positioning in the car market.
Would I be better off getting a bank loan and spending £4-5k on a younger, lower mileage model?
Can I afford leasing and get something fun?
Any advice is most welcome!
Edited by zingrock on Tuesday 20th August 23:00
My advice from personal experience and a few missteps in my younger days would be to buy low, with your own savings if possible... £2-3k will buy something perfectly serviceable and still interesting, and you won't be financially tied into repayments.
The coolest and rarest JDM cars i've had have all cost sub £2k to buy.
The coolest and rarest JDM cars i've had have all cost sub £2k to buy.
Firstly go to your bank & get a loan for 4k then look to spend around 3k & you can get a decent set of wheels, the other 1k is to go towards servicing & insurance your new car.
How many miles will you be doing?
Mercedes CLC180 Sport haggle & you'll get most of the above for 3k
https://www.autotrader.co.uk/classified/advert/201...
200
https://www.autotrader.co.uk/classified/advert/201...
C200 Coupe Sport Edition
https://www.autotrader.co.uk/classified/advert/201...
325ti Sport
https://www.autotrader.co.uk/classified/advert/201...
325ci
https://www.autotrader.co.uk/classified/advert/201...
https://www.autotrader.co.uk/classified/advert/201...
How many miles will you be doing?
Mercedes CLC180 Sport haggle & you'll get most of the above for 3k
https://www.autotrader.co.uk/classified/advert/201...
200
https://www.autotrader.co.uk/classified/advert/201...
C200 Coupe Sport Edition
https://www.autotrader.co.uk/classified/advert/201...
325ti Sport
https://www.autotrader.co.uk/classified/advert/201...
325ci
https://www.autotrader.co.uk/classified/advert/201...
https://www.autotrader.co.uk/classified/advert/201...
I think a loan is good advice. Financing like PCP, Lease, etc looks attractive because you get a much fancier car. However, after 3 years paying £400 pcm you’ll have to either buy or give back the car and so will have little to show for all that money (what you’ve done is just paid for its depreciation). Whereas with a loan you are paying interest, but also capital, so at the end of the period you owe nothing and own a car. Plus, cheaper car means cheaper insurance, which is another saving.
Re the Mk2 MR2 I think those are one of the best value cars available. A gorgeous looking, mid-engined sports car that is fun to drive and yet also cheap and reliable to run... ideal. I had one when I was about your age (a long time ago!) and absolutely loved it. Choose carefully and should be able to get a good one for 3-4K.
Re the Mk2 MR2 I think those are one of the best value cars available. A gorgeous looking, mid-engined sports car that is fun to drive and yet also cheap and reliable to run... ideal. I had one when I was about your age (a long time ago!) and absolutely loved it. Choose carefully and should be able to get a good one for 3-4K.
Just an observation, but that BMW 325ti has been listed for months - it's just too dear! Presumably because the seller thinks the BMW Individual paint and trim justifies it.
I bought an Imola Red Sport in December 2014 on 80K miles for £1,995 and sold it last March for £1,495 on 103K miles so you should be able to do better than that - they just don't come up too often any more.
Depending on where you live you might want to think about having a few hundred set aside for another set of wheels with used winter tyres - RWD BMWs on summer tyres on ice don't really work!
I bought an Imola Red Sport in December 2014 on 80K miles for £1,995 and sold it last March for £1,495 on 103K miles so you should be able to do better than that - they just don't come up too often any more.
Depending on where you live you might want to think about having a few hundred set aside for another set of wheels with used winter tyres - RWD BMWs on summer tyres on ice don't really work!
Interestingly, I'm going to be in a very similar situation soon. I'm also 24 and gonna be getting my first post-uni job soon.
A few thoughts from me:
In regards to personal loans and hire purchase, in my experience you are fairly unlikely to get the headline rate. I've been doing some quotes today, and was quoted (with a 22k gross income) by my bank a rate of 15% on a personal loan. This is for someone who has a pretty good credit rating.
You might not be able to get finance very soon if you've just started your first real job. I don't know what requirements lenders have on the amount of time you have had to be with an employer before you can get approved.
I dunno what the situation with leasing companies is.
Also, I would say that if you're looking to to mortgage in the near future, then car finance does obviously tie you up for a year or two. Buying outright with savings doesn't.
A few thoughts from me:
In regards to personal loans and hire purchase, in my experience you are fairly unlikely to get the headline rate. I've been doing some quotes today, and was quoted (with a 22k gross income) by my bank a rate of 15% on a personal loan. This is for someone who has a pretty good credit rating.
You might not be able to get finance very soon if you've just started your first real job. I don't know what requirements lenders have on the amount of time you have had to be with an employer before you can get approved.
I dunno what the situation with leasing companies is.
Also, I would say that if you're looking to to mortgage in the near future, then car finance does obviously tie you up for a year or two. Buying outright with savings doesn't.
Edited by jkk45 on Tuesday 20th August 23:53
Not RWD and not hugely fast but you could get a decent Celica 140 bhp for £2k or less or a Corolla T sport. Not sure about insurance costs on those. Or a Renaultsport Clio. Each may hold their value if looked after and NOT Barried.
If you are doing engineering (and a motorcyclist) one may assume that you have a modicum of savvy for maintaining or learning to maintain your own cars.
You can buy a cheap car and enjoy it. DONT get into debt it's not worth it.
If you are doing engineering (and a motorcyclist) one may assume that you have a modicum of savvy for maintaining or learning to maintain your own cars.
You can buy a cheap car and enjoy it. DONT get into debt it's not worth it.
Loan is probably the most sensible option. £4k over say 2-3 years and if you avoid buying a run of the mill white goods car, it will still be worth something at the end, then rinse and repeat. In time you will end up with an asset than can be used towards a deposit on a house. Worked really well for me 
Avoid the trappings of shiny new cars and leases - whilst they have their place and i am not slating them, a young person with no savings is not one of them.
Avoid the trappings of shiny new cars and leases - whilst they have their place and i am not slating them, a young person with no savings is not one of them.
A good mid 2000's 320 i or d (choose your poison) can be good fun, but if you're not spending much, it's a lot more fun driving a slow car fast:
Yaris Tsport
Corolla Tsport
Cooper R53 S
Civic Type R EP3
Or my personal fave, Clio 172/182
Obviously do not by a chavved one, they are all capable cars that'll you'll spend more fun in than a lower spec RWD
Yaris Tsport
Corolla Tsport
Cooper R53 S
Civic Type R EP3
Or my personal fave, Clio 172/182
Obviously do not by a chavved one, they are all capable cars that'll you'll spend more fun in than a lower spec RWD
ottermanuk said:
A good mid 2000's 320 i or d (choose your poison) can be good fun, but if you're not spending much, it's a lot more fun driving a slow car fast:
Yaris Tsport
Corolla Tsport
Cooper R53 S
Civic Type R EP3
Or my personal fave, Clio 172/182
Obviously do not by a chavved one, they are all capable cars that'll you'll spend more fun in than a lower spec RWD
I mean half those cars are quicker than a 320i or d...Yaris Tsport
Corolla Tsport
Cooper R53 S
Civic Type R EP3
Or my personal fave, Clio 172/182
Obviously do not by a chavved one, they are all capable cars that'll you'll spend more fun in than a lower spec RWD
Save up some money and buy a car for around £2000-£2500. Getting into debt isn't a good idea just for a car. You never know how reliable it is going to be. If you get a loan and the car turns out to be a pile of rubbish and needs fixing every month you'll regret getting a loan on a car you can't drive half of the time. Plus if you have to sell the car for any reason you never really get what you paid for it. So again you'll have wasted money paying interest on the loan.
If it were me I'd save up and look to save up the amount I said and buy something like a Honda or Toyota yes it's not RWD but you'll have just as much fun especially in a Type R or T Sport. You'll have plenty of cash left to look after the car and not be in debt. If you don't like the car then you can sell it and make money back not worrying about paying the bank back.
If it were me I'd save up and look to save up the amount I said and buy something like a Honda or Toyota yes it's not RWD but you'll have just as much fun especially in a Type R or T Sport. You'll have plenty of cash left to look after the car and not be in debt. If you don't like the car then you can sell it and make money back not worrying about paying the bank back.
Whatever you think you have budgeted for a car (£400pcm?) half it, and that is your real budget. Use the remaining half for the inevitable bills which will come in. Even if it is 100% reliable it will still need servicing, tyres and other consumables.
Money is cheap these days. £200pcm will get you a loan of 11k on five years or 7k for three, which can buy you some interesting and non-sheddy stuff. The remaining £2400 should comfortably cover the running costs unless you pick something totally left-field.
For 11-7k there is a lot out there, classic or modern, sporty or comfortable. The choice is yours.
You didn't say whether your £400pcm budget included insurance? That will make a huge difference of course.
Money is cheap these days. £200pcm will get you a loan of 11k on five years or 7k for three, which can buy you some interesting and non-sheddy stuff. The remaining £2400 should comfortably cover the running costs unless you pick something totally left-field.
For 11-7k there is a lot out there, classic or modern, sporty or comfortable. The choice is yours.
You didn't say whether your £400pcm budget included insurance? That will make a huge difference of course.
There's no right or wrong here but personally if I wouldn't get a loan to purchase an old car which is likely to be throwing up repaid bills long before you've paid it off. I'd either save a couple of grand and cash buy something interesting or (flame suit on) lease a new car which provides fixed price motoring.
Hounestly my advice would be to save up and buy a car for few thousand $. I did the same thing a bit younger than you and bought a supra for 5k (back in 2005), it was my first car. Also picked up a BMW 330ci for 2k, Incredible rwd cars.
Just some advice from someone who got in the loan game younger than you.. if it is the first time you are experiencing proper influx of money the last thing I would suggest doing is taking a loan. I'd say first get used to your job, your income and living within your means, then after that see how you feel.
Just some advice from someone who got in the loan game younger than you.. if it is the first time you are experiencing proper influx of money the last thing I would suggest doing is taking a loan. I'd say first get used to your job, your income and living within your means, then after that see how you feel.
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