Spec me a Car

[Blaineoliver]

Heya everyone, been lurking for a while but thought the Hexus community could help me. I am finishing at university now, sorting myself out a job, and I am going to get myself a car again after a couple of years of not having one. I am 21 and have no no-claims, general low power brand new cars are not costing me that much on insurance, about £600 a year. I was wondering is it better to go for a brand new car on cheap finance, as some come with free insurance, or to get a car thats a year or two old on finance and get insurance separately. I have no money for a deposit, looking to get a car within the next 2 months and am thinking of something like a polo in size and budget of about £200 a month ideally, but probably could stretch a bit further. Thanks

[jimbouk]

Save the £200 a month for a year and buy a cheap car and insurance? Some people like having newer cars, personally I've never had the inclination (or money) to splash out in anything that nice! Not owning what I drive would scare me as well, I'm the cautious sort who doesn't like to live on credit.

[kalniel]

I think you need very good reasons to go for a new car, because they cost a LOT more than second hand cars, and that price will be paid somewhere (to the point where insurance is easily swallowed up in the margins), even with finance schemes. So I guess if you have to buy a car with no capital, still go for the cheapest you can get finance on/a loan for.

So an example, get a £5000 loan like the ones here:
http://www.moneysupermarket.com/loan...spx?PageId=102
which is roughly £150/month over 3 years.

For £5000 you can get a very nice second hand small car or even something larger. And you'll lose less with depreciation when you want to sell it.

[Blaineoliver]

Having a car is a requirement as a lot of the jobs i'm looking are are too far to walk or cycle. I think you are right, a £5000 loan would definitely work out quite cheaply, the only concern I do have is that insurance jumps up even at 21 on older cars. The lower depreciation is definitely a good factor in trying not to waste money.

[kalniel]

If separate insurance costs are high for a 21 year old then you can be sure the finance costs will also be high if they include insurance. Older cars aren't more expensive to insure than newer ones like for like, they're much cheaper because the write-off value is lower.

[Blaineoliver]

They are more expensive, main reason is that the older cars tend to have less pedestrian friendly bonnets increasing likelihood of disabling people from accidents. I compared an old 1.2 polo to new one, the newer one was cheaper to insure.

[kalniel]

They are more expensive, main reason is that the older cars tend to have less pedestrian friendly bonnets increasing likelihood of disabling people from accidents. I compared an old 1.2 polo to new one, the newer one was cheaper to insure.

Right, but that's not like for like. You can get cheaper insurance by buying a car of cheaper insurance group, regardless of it's age. Insurance on a new mondeo vs a 5 year old one (which you could get for your £5k) will be higher, because it's the same model but market value is higher.

[AETAaAS]

Around the Polo area, you could go for a Fiesta or a Corsa which are usually cheaper to insure. I wouldn't buy new since the depreciation is always steep, and you will easily lose half the value in the first 2 years.

[circuitmonkey]

By no means a pretty car, and not something I've personally driven but the Kia Picanto might be worth a look
£5k should get you a 2 year old car with 5 years left on the warranty, 1.1l engine is rated as having a combined consumption of 58.8mpg and insurance is group 3, so should be nice and cheap run

[Blaineoliver]

Very good idea on the kia. I suppose these days brand is just design and preference and reliability seems to be good across the board.

[finlay666]

Cheap car all the way,

You can get a more powerful car, and don't forget once the free insurance ends you will have to insure it while still making payments on it

[Butcher]

Another vote for a second hand car here. If you buy a car that's 2-3 years old it will have lost around half of its value. So you're saving around £1k a year in depreciation, which should be more than you're saving by having cheaper insurance. Don't forget your insurance will tend to decrease as you build up some NCB, after the first year you may well see a large drop.

[finlay666]

Also worth actually looking at the insurance on a vehicle before buying, some are surprising with the difference from a 'small' car to a bigger sporty one. Think a bit different, Seat Ibiza/Skoda Fabia (Skodas have quite an old image) instead of VW Polo, or 'cheap' cars like Hyundai.

Don't forget your excess will likely have an additional £250+ mandatory excess as a 'young' driver (21-25). My last car was less hassle to buy a new car and replace it than to claim off the policy because of the excess (£650 excess, £780 car and had it for over a year) if you get a banger you will save a ton and learn how to maintain/fix it yourself

I'd probably spend about £2-2.5k on the car and factor in the rest for insurance and maintenance on a 5k budget to get started

[Zak33]

if this is sheer finance based/..... add it up

If a new car comes with lower interest rate finance, and if you need to borrow the money to get ANY car,....., and free insurance and it's all new (ie 3 year warranty, new tyres and clutch etc.....,.... it IS possible that its cheaper to get a new car.

Why? Because it asometimes DOES add up.

BUT>.. it you've got .. lets say... £3000 saved, and you live somewhere that, IF the car died short term your mum could drop you to work for a week while its fixed.... a used car can be better.

Over all answer..... honesty with yourself. NEVER convince yourself of anything.... always review it, pound for pound.. and THEN decide.




however.. if you just NEED a car.. a certain car.... the ONE car.. and it makes you happy ever morning for 3 years....

then.. hell... buy it.. and be happy.

[ehhhhhhh]

I'm not sure if it's a good idea to start your career with debt from the start because of a car. At the end of the day it's just a tool to get you from A to B and it loses value with every minute passing, not to mention the mandatory maintenance and running costs.

If you'd need a loan to buy a car for 5K, then it's not wise to even consider them.

I would save for a bit and buy a simple car (ford Ka, fiesta) around £500.

btw, am I the only one who thinks it's very irresponsible to recommend any form of loans?

[kalniel]

btw, am I the only one who thinks it's very irresponsible to recommend any form of loans?

If you need a car before you can raise *any* capital then there's no alternative. Loans cost you more, no doubt, but what's irresponsible about them?