Young Drivers Car Finance
Are you a young driver looking for an affordable car finance plan? Get in touch with our expert team here at ChooseMyCar today to discuss the best options for young drivers and freshly passed motorists!
Borrowing £6,500 over 48 months with a representative APR of 21.4%, an annual interest rate of 21.4% (Fixed) and a deposit of £0.00, the amount payable would be £196.24 per month, with a total cost of credit of £2,919.52 and a total amount payable of £9,419.52
How do young drivers get car finance?
Is there anything that beats the excitement and elation of passing your driving test? Whether you’re a proud first time passer, or someone who has finally managed to pass after months of hard work, the ability to go anywhere at anytime with your new driving licence (without relying on parent taxis!) gives you the kind of freedom you’ve never had before! It’s time to put all that theory and practice into place. But for that, you’re going to need a car.
As a young or first time driver, it can be an incredibly daunting task when looking to buy a new car – or even your very first car. Here at ChooseMyCar, we understand just how overwhelming the entire process can be – which is why our trained team of expert professionals are on hand to provide you with the guidance and advice you need to make the best decisions moving forward.
The truth is that young people can often find it difficult to find the right car for them. Buying and running a car is a bit of a balancing act – you need something that is affordable and reliable, will offer relatively cheap car insurance, is affordable to run and is still stylish and good looking. When you add to this the fact that a lot of lenders and finance providers are reluctant in dealing with young people and new drivers, finding a suitable credit agreement and car finance option can become very challenging.
Car finance may be difficult to get for young drivers, but it’s certainly not impossible – contact the experts here at ChooseMyCar for more guidance
As you have probably already realised, finding good car finance as a young driver can be frustrating and long winded – especially if you have never done it before. But while it may be difficult and feel like an uphill battle, there are plenty of options ahead of you to choose from. If you’re worried or confused, then you have come to the right place. Get in touch with the experts here at ChooseMyCar for further guidance, advice and assistance. We have plenty of experience working with young drivers and no one is better positioned to help you find standard car finance that meets the needs of your financial circumstances.
I’m a young driver looking for a suitable car finance agreement – what options are open to me?
For any young person looking to own their first car, there is no doubt that purchasing a used car can be one of the best and most cost effective ways of making car ownership a reality. And purchasing a used car through car finance can make it even more affordable! Fortunately, dealing with used cars is exactly what we specialise in here at ChooseMyCar, so you couldn’t have come anywhere better.
Car finance allows you to pay off the cost of your car in smaller and more manageable monthly instalments. When your potential lender has checked to make sure you have the regular income to afford these payments without defaulting, you’ll be in a fantastic position to secure yourself a beneficial car finance deal – a great option for many young people and new drivers who want to drive but need to keep costs down.
But car finance isn’t just one service – there are a range of different options open to you when choosing a suitable car finance agreement as a young driver. They each come with their own benefits and drawbacks, and it’s an important process to look at all your options before deciding on what works best for you. Hire purchase (HP) and personal contract purchase (PCP) agreements are the most popular and common forms of car finance, involving monthly payments and a deposit. The full range of options includes:
HP (Hire Purchase)
This is an option that allows you to pay in instalments over a fixed term and own the car at the end of the car finance term. Hire purchase usually involves a deposit, but upon the final payment the car will officially belong to you outright.
PCP (Personal Contract Purchase)
Similar to the hire purchase car finance agreement, the personal contract purchase usually involves a small deposit and fixed monthly payments. However, at the end of the agreed loan period, you will be required to pay a balloon payment in order to own the car, or hand it back – this is an optional final payment.
PCH (Personal Contract Hire)
If you are not interested in owning a car outright, then the personal contract hire route may be best for you. This is a lease contract in which you make scheduled repayments for which you are renting the car – there is no purchase involved. When your fixed term and finance instalments are completed, the car is returned rather than being bought.
PL (Personal Loan)
If you want to seek an alternative to other car finance options, then a personal loan is a method that sees you borrow money from a bank or other lender, using this loan to purchase the car outright. This makes the process similar to that of cash buying, only you pay back your bank loan directly to the lender over time.
GL (Guarantor Loan)
When younger drivers are looking for a car finance agreement, sometimes lenders will look for an extra level of assurance – this can often be achieved through a guarantor loan. With a guarantor loan, a third party is involved (your guarantor) who will be responsible for making payments if there is a problem and you find yourself unable to make a monthly payment.
Taking the personal loan route as a younger driver
As a unique alternative to other car finance options, securing car finance through the personal loan route allows you to purchase a car right from the outset. Taking a personal loan means taking a loan with a bank of other lender, and using this to purchase the new vehicle. With this option, your bank loan is paid directly back to your lender. For younger drivers, this can mean that, due to a lack of credit rating, you are subject to higher interest rates and longer terms.
What are some of the benefits to getting car finance as a younger driver?
If you have recently passed your driving test, are looking to buy your first car or are hoping to purchase a new vehicle and you are 21 or under, it might seem like getting car finance is a huge obstacle to overcome. While there are certain challenges to securing car finance, such as a lack of credit report and financial stability, it is certainly worth pursuing for a number of different reasons.
For example, young drivers may want to take full advantage of the fact that financing a car means that you don’t have to pay a huge lump sum out of your bank account at the beginning. Most finance purchase options require some kind of deposit, but you still have the peace of mind of knowing that you will be paying for your car through manageable monthly instalments.
This is useful especially for first time buyers whose current situation might mean that they are facing high car insurance costs from their insurance company. Of course, a lot depends on choosing the right car in the first place. Young drivers will almost always find themselves in an insurance group that faces them with premium costs – as such, the manageable instalments of car finance can help mitigate the impact of the overall costs.
Pay as you go car finance options such as hire purchase and personal contract purchase require an initial deposit payment followed by regular scheduled repayments. Ownership of the car only becomes yours when the final payment has been made (or a balloon payment has been made at the end of a personal contract purchase agreement) and the rate you pay often depends on your mileage. As such, this flexibility is often a great choice for young drivers.
What are the best cars for Young Drivers?
When you’re looking for your first car as a young driver, there are a few things you’ll want to consider. You will want to make sure that you get a good car finance deal that’s affordable for your current situation, but you’ll want to consider the type of car and how it matches both your driving ability and your needs.
In terms of value, young drivers are generally looking for a good deal on a car that is affordable to run, especially as their insurance rates are likely to be high. As such you’ll want to look for cars that can be bought on car finance cheaply, but also offer the chance of having lower insurance premiums.
A number of good deals can be found across the major manufacturers, like Ford, Peugeot, Skoda, Seat, Vauxhall, VW and Hyundai. Buying a used car from one of these manufacturers can be a great entry point to car ownership.
Particularly good examples of used cars that may offer a good deal, as well as a safe driving experience include:
At ChooseMyCar we work with approved and trusted local car dealers all over the country, with approved used cars starting from around £3,000 which could be as little as £54* per month through a Hire Purchase Agreement.**
Start your journey to your first car today by starting a search for used cars for sale near you, or read our guide on the cheapest cars to buy on finance.
- Used Vauxhall Corsa
- Used Ford Fiesta
- Used Skoda Fabia
- Used Peugeot 208
- Used Hyundai i10
- Used Fiat Panda
- Used VW Up!
*Based on an excellent credit score. Representative example “Borrowing £6,500 over 48 months with a representative APR of 21.4%, an annual interest rate of 21.4% (Fixed) and a deposit of £0.00, the amount payable would be £196.24 per month, with a total cost of credit of £2,919.52 and a total amount payable of £9,419.52.”
**Hire purchase (HP) is an affordable way to buy a vehicle as it allows you to pay a deposit, and then make monthly payments to pay off the remaining amount. You’ll be the registered keeper of the vehicle and responsible for insurance, servicing and maintenance, but the finance company will be the legal owner of the vehicle until the outstanding finance (including interest and fees) is paid off.
Get in touch with our friendly team of experts today
Looking for student car finance and young driver car finance can be tricky – we understand that here at ChooseMyCar. That’s why we have excellent resources like our car finance calculator and guide to improving your credit rating here on our website. But we know that sometimes the best thing is to speak to a professional who really knows what they’re talking about.
Well, you couldn’t have come anywhere better than here at ChooseMyCar. If you want more guidance and assistance, just apply with us today. Our friendly team are all industry experts with the insight and expertise necessary to guide you to a car finance agreement that suits your financial situation.