19 and I’d like a new car - what’s the best way to go about it?

[javierlopez]

I’m 19 and I’ve been working my first full time job since August, earning about 1.3k after tax and ~£700 left after I’ve covered board, my current car insurance, tax, petrol etc. I commute around an hour each way 3 days a week and drive a fair bit on weekends/wfh days too.

My current car is an old Clio and although it is in working order it does have a few issues (loud noises and faulty electrics) and my MOT is coming up next month which could end up costing a fair bit. I want a nicer second car as I use mine a lot and I’m generally quite interested in them, so more than a runabout would be nice.

My options right now are to finance one (be it through a loan, HP or PCP) or to buy outright. Using part ex and my savings I could put down about 2.5k towards a new car.

Buying one outright wouldn’t be much of an upgrade and seems pointless with my current budget. PCP allows me to get the best quality for my money but seems like an overall waste as I’m trading an asset for a constant expense since the final payment never seems worth it. Going for HP/Car loan seems like a good option because I can put down my deposit and still get an asset in the end, however I’m not sure if it’ll be worth it with how much it’ll depreciate over the 3/4 years.

If I was to go PCP/HP, I’d be looking to spend ~£170, which budgets in lower insurance as I’m currently overpaying what I could be. What would your advice be, is it wise to get a new one or should I just run the clio into the ground? Cheers

 

[tonygleim]

@javierlopez Don't spend money you don't need to, spend as little as possible now and save for money freedom in the future.

Maybe wait to see the outcome of the MOT? Shop around for repairs, learn to service/repair your own car?

I wish somebody talked me out of spending money on a new car when I was 19!

 

[javierlopez]

@tonygleim Cheers for the advice mate!

 

[donnats]

@javierlopez I was a bit older than you but I took out a £6K personal loan in 2018 for a used car, paying roughly £155 for 48 months and I sort of regretted it halfway through as I started getting other bills, was unemployed for a short period, got a girlfriend, trying to save to move out etc.

I own the car now which is great but when I think about that £7K+ I paid back now, it could have been spent/saved for something more important. I also got into a bad habit of financing things once I learnt how easy it was after getting my car, next minute my direct debits are £500 per month while still living at my parents - not everyone will be as thick as that though!

Despite the above though, similar to you I have an interest in cars so I completely understand that itch for something a bit better so for balance…

If I was you I wouldn’t touch anything brand new regardless of the finance options available, wait till you’re earning good and moved out for anything like that. Not to mention I dread to think what the insurance would be on even a low spec 2024 hatchback for a 19 y/o.

But if your Clio is getting to its last legs or you just want something nicer then try and wait till November/December when used car dealers start dropping their prices to try and meet/exceed end of year targets or even wait until the January sales.

Then let’s say your part ex & deposit is in the £4K region by then, if you can’t find anything suitable for that alone then look for a personal loan to top up your budget but don’t be borrowing anything that takes longer than 2 years to pay back. That way if you have regrets it’s not that long, you’re done by the time you’re 21/22 and then if you don’t mind the finance life or earn more money then you can go again!

 

[javierlopez]

@donnats Cheers mate

 

[quintessentialramble]

@javierlopez Advice from an "ex" car guy. Now early 30's but in my early and mid 20's I was a fool with cars. Never took out finance but spunked loads. Toyota MR2 lost about 1k, Subaru SVX lost about 4k, Subaru Brat no1 lost 2k, Subaru Brat no2 lost about 5k, Toyota Corolla T sport lost about 1.5k, BMW E30 lost about 1k. Yes granted some of these issues were the nature of the cars, but you know what I wish I just had a run of the mill 1.6l Astra or Focus. Thinking back now it just makes me cringe, heck the fuel bill on the SVX is enough to make me cringe on it's own. Trust me, cars are not worth it, they are a necessary evil for most of us unfortunately, they are just deprecating assets that cost thousands to fuel tax and insure every year.

Keep the Clio, keep up with servicing it. Buy a Haynes manual and learn how to do some fixes yourself that come up.

When the Clio does die, because it is french I saw a good piece of advice, 20% minimum deposit, maximum 8% of your take home pay and a loan maximum length of 36 months.

 

[javierlopez]

@quintessentialramble Thanks for the advice mate

 

[julia736]

@javierlopez "I bought an Audi RS3 and I regret it."

You might find one of these books helpful:

• Your Money or Your Life - understanding what's valuable to you and how to use money to achieve your goals.
• Millionaire Next Door - "How people in normal jobs, electrician is a great example, can accumulate wealth over time through good choices."[sup]Electric_Cat_999[/sup]
• One of Clare Seal's books - "her focus is on the link between emotions and spending".

 

[ajay24]

@javierlopez Why do you think buying outright won't be much of an upgrade?

 

[mindfulb]

@ajay24 Because he has £2500 to put down. Unfortunately 2.5k doesn't get you very far with buying a car nowadays.

 

[ajay24]

@mindfulb I had misread as £2.5k plus the part ex.

Realistically assuming it's a shot old Clio worth 2k, a 4.5k would be an upgrade.

Rereading, I'd still look to buy outright

Not sure what engine the Clio is but for a 1hour commute, with £2.5k you can step up to the next size of car, with a decent sized economical engine.

It's 13 years old and will need maintenance, but so would the Clio, and with no monthly payments or can be budgeted for.

http://www.autotrader.co.uk/car-details/202403237884671

 

[javierlopez]

@ajay24 Cheers for the suggestion mate