Car finance for a 20 year old

AaronLam

So I've applied for car finance today via my local garage for a 142 Ford Focus 1.6 , I've to pay back €60.59 a week over the 5 year period. I've a full time job of €340 a week. Then other income of €250 as I've a part time Chinese delivery job. Only problem is I'm in arrears with my credit union (€225) in arrears. But I'm paying them back extra every week to get it cleared. Will this mean a straight no from the finance company as its in arrears? Thoughts? Thank you.

ShadowHearth

My advice first woukd be to actually check what apr is your bank giving, then garage and what apr loan you can get in credit union.
Some garages give nice 3.9% and some give colossal 11%+. On that kind of sum it will be a lot of money just to cover apr, to the point where you better of going pcp+scrapage on brand new and after 3 years refinance balloon, or pay off part of balloon and refinance the rest. You will own that car after 3 years too.

Do maths not on how much you will pay per week, but how much it will cost you in total with apr added. Then see if you can or cannot afford these payments.

As for will they give it to you? It depends on your credit history. The only way to find out is go in and let them check it.

bazz26

It depends on whether they have access to check your credit history with the credit union but if they do then it would not look good for you as it raises your risk you not having the ability to repay the loan.

On a side note and not trying to tell you your business but given that you're in a bit of bother repaying the credit union loan, do you think it's wise taking on an additional debt? The bank will not be as flexible with repayments if you get into difficulty repaying that finance. Would it not be more prudent to buy a slightly older car that wouldn't require you to finance as much. It just seems a lot of debt to be getting into at only 20 years of age to me.

AaronLam

bazz26 wrote: »

It depends on whether they have access to check your credit history with the credit union but if they do then it would not look good for you as it raises your risk you not having the ability to repay the loan.

On a side note and not trying to tell you your business but given that you're in a bit of bother repaying the credit union loan, do you think it's wise taking on an additional debt? The bank will not be as flexible with repayments if you get into difficulty repaying that finance. Would it not be more prudent to buy a slightly older car that wouldn't require you to finance as much. It just seems a lot of debt to be getting into at only 20 years of age to me.

That's a good question, they've just sent me an email to tell me I've been approved for finance, I've been approved for €12,000. The car is €13,750. So don't know what I'll do.

TBi

AaronLam wrote: »

That's a good question, they've just sent me an email to tell me I've been approved for finance, I've been approved for €12,000. The car is €13,750. So don't know what I'll do.

Negotiate. "It's all I have. I'll do the deal right now if you take 12k".

bazz26

AaronLam wrote: »

That's a good question, they've just sent me an email to tell me I've been approved for finance, I've been approved for €12,000. The car is €13,750. So don't know what I'll do.

Depends on whether your credit union is a member of the ICB I'd guess:

http://www.icb.ie/membership.php

ShadowHearth

Okay, op, just a question to you.

225eu debt sounds silly and you paying it off weekly? It's extremely small sum, why don't you pay it off?
If you are looking at 14k car, you do have at least some savings on you? Or if you will take on that loan, buy that car, it will be all your money thrown at it amd you live from wages to wages?

If that's the case, I would strongly reconsider that 14k debt you about to put yourself in for 5 years. No offence, but you will only damage yourself and kind of ruin your 20s.
As mentioned above you would be better off with something up to 5k eu. Cheap and cheerful. You do know that insurance might be a boggtmare for you and you can't really use privately insured car for deliveries?

kirving

I really wouldn't be putting myself into debt like that at 20 for the sake of a car.

The repayments will constantly inhibit your ability to go on nice holidays for years to come, which will be very difficult to do when you're older with kids, mortgage, career, etc. I could afford a much nicer car in the morning if I wanted, but there are experiences I can spend my money on instead which will be very difficult for me to do in a few years.

Plenty of time for an expensive car when you're older.

newacc2015

Im not trying to be rude. But with such a low income, why are you buying a 142 car on credit? You can even back the arrears on your CU loan and you want to get more heavily in debt? It makes no sense at all in my opinion.

You would be far better off buying a car that is only around €4-5k and living within your means ie paying off your CU loan.

colm_mcm

It's got the potential to be a millstone round your neck till you're 25. I'm guessing you're living at home at the moment. There are a lot of things you can do in your 20s like travel, study etc which having a car loan and a depreciating car could prevent.

vandriver

If it's 60.59 a week for 12k over 5 years,this is roughly 12.5% Apr.Thats a bit chunky.

ShadowHearth

vandriver wrote: »

If it's 60.59 a week for 12k over 5 years,this is roughly 12.5% Apr.Thats a bit chunky.

12.5?! No wonder they approved it lol. Might as well take 12K off credit card. :pac:

edit: it's actually about 10% for 12K finance he will pay 3.2K in Apr over 5 years!!!
So car will cost him about 17K in total.

http://www.consumerhelp.ie/loan-calculator

Love this website.

jimmy blevins

It's madness to be paying that level of interest on a depreciating product, also consider the cost of maintaining it.

vandriver

ShadowHearth wrote: »

12.5?! No wonder they approved it lol. Might as well take 12K off credit card. :pac:

edit: it's actually about 10% for 12K finance he will pay 3.2K in Apr over 5 years!!!
So car will cost him about 17K in total.

http://www.consumerhelp.ie/loan-calculator

Love this website.

By that website,its 11.9%

J.pilkington

Before you commit to the purchase and be liable for payments which can only be funded via your takeaway deliveries job make sure that you can actually get the correct insurance.

You are not covered under a standard insurance policy to make takeaway delivers and it's only a matter of time before the guards clamp down on this and you get prosecuted for driving without insurance

vandriver

J.pilkington wrote: »

Before you commit to the purchase and be liable for payments which can only be funded via your takeaway deliveries job make sure that you can actually get the correct insurance.

You are not covered under a standard insurance policy to make takeaway delivers and it's only a matter of time before the guards clamp down on this and you get prosecuted for driving without insurance

I'd guarantee that delivering takeaways is an uninsurable use of a car.

mayota

LIGHTNING wrote: »

If your buying a car for a take-away delivery job why not just get a old Japanese petrol car for next to nothing? It's going to have a hard life so why ruin a nice new car. And why bother get into that debt at 20 years old. Grab yourself a Yaris or Corolla for 1-2k and drive it into the ground

Ya, get an ae86 and a dash cam.

ronnie3585

That's a LOT of debt, at an extortionate rate of interest, to be shouldering at 20.

You'll thank yourself in a couple of years if you buy something old and reliable now and pay off your credit union debt.

James Bond Junior

One of my regrets of my early 20's is buying expensive cars on credit union loans. I always paid of early and never borrowed more than half of the value but I think I should have got cheaper cars and enjoyed myself more!

J.pilkington

J.pilkington wrote: »

Before you commit to the purchase and be liable for payments which can only be funded via your takeaway deliveries job make sure that you can actually get the correct insurance.

You are not covered under a standard insurance policy to make takeaway delivers and it's only a matter of time before the guards clamp down on this and you get prosecuted for driving without insurance

The guards will never give a fiddlers about this. The only way some one will be uninsured delivering Pizza is if they are stupid enough to say they were delivering pizza in the event of a crash.

FortySeven

Why not just buy an older focus you can afford. It's not like it's an exotic. It's a focus.

Madness to spend that much at your age on a bog standard car.

colm_mcm

The women all want lads in A4s anyway

bisset

whats the quote on the insurance with and without business use?

CianRyan

Take that €60 a month, throw it in your bank account and in 5 years when you've got €14,000, a long term partner and you're looking for your first house I'll let you buy me a pint for telling you not to buy an expensive, boring car at a time when you can't afford it.

Also, I make far less than you, I'm 6 years older than you and I can afford to put away €200+ on a bad month and I still wouldn't take out that loan, not in a million years.

Buy a car for 10-20% of the focus that will be 100% more enjoyable.

Shannon757

mayota wrote: »

Ya, get an ae86 and a dash cam.

On his budget?
https://www.donedeal.ie/cars-for-sale/ae86-twincam/13917780

vandriver

bisset wrote: »

whats the quote on the insurance with and without business use?

Business use doesn't come close to covering delivering takeaways.

J.pilkington

Cain Skinny Sculpture wrote: »

The guards will never give a fiddlers about this. The only way some one will be uninsured delivering Pizza is if they are stupid enough to say they were delivering pizza in the event of a crash.

That's dangerous and innocent advice to be given on a public forum.

Guards are well known to tackle / ambush specific segments where law breaking is known to be going on, it's only a matter of time and it will be a very easy and successful operation with far reaching consequences for the young lads whom you are advising to not worry about having insurance.

J.pilkington

J.pilkington wrote: »

That's dangerous and innocent advice to be given on a public forum.

Guards are well known to tackle / ambush specific segments where law breaking is known to be going on, it's only a matter of time and it will be a very easy and successful operation with far reaching consequences for the young lads whom you are advising to not worry about having insurance.

The Gardai are not in the business of enforcing the fine print of insurance policies. If a person has a valid policy then the guards won't be interested. Insurance policies have all sorts of stipulations that are not the remit of the Gardai to investigate and ensure people are following.

If they crash and are proved to be doing something outside the terms of their policy that's when the trouble starts. I advised nobody to not worry about having insurance.