Hello, this year I’m getting my driver’s license and plan on working the whole summer to buy a vehicle. The whole time my plan was to spend on a car as much as I can from the summer’s job money (which is as I calculated should get me to around 8k).
Now I though of another idea. There’s a car that I really like and that has cheap maintenance and is reliable in the long run. But it costs ~18k. So the plan is: take out a loan for 18k, put in 8k as the first payment and pay around ~170euros as monthly payments for 4-5years. I would of course need to find a job that I can work during my studies. How risky is it and is there any logic in that?
Comments
It’s great that you’re planning ahead, but taking on debt at 18 is risky, especially with uncertain income during school. Maybe consider starting with a reliable used car you can buy outright, then upgrade later when you’re more financially stable.
Don’t take out a loan or make a major purchase without a steady job- not something seasonal.
Don’t buy a car you don’t need, period.
If you need the car and have a long term job, fine. But that’s if you actually need a car.
When I was your age, a big percentage of my friends took out loans for cars. At the time, they were living with parents and could afford it. Fast forward 10 years, theyre a few cars down the line, lost money each time they switched out cars, and they regret wasting that money.
On the other hand, I had friends who spent that money on alcohol, clothes, fast food, and partying, and they also regret spending their money the way they did.
I’ve taken loans for cars, and it’s great for 6 months, then you’re lumbered with paying for a car that you’re not that bothered about anymore. I would honestly just try to live within your means, it’s good practice for when you move out of your parents’ house. And having the lowest possible outgoings is the way to an earlier retirement.
Take out an 18K loan for a car is definitely not a good idea. I bought my very first car 7 months ago. What I’ve learned is that a car is a liability. It costs to run. It costs to maintain. It costs to insure. You worried about it getting stolen. You worried about other people banging or scratch yours wherever you park. The value of a car always goes down, and the cost to repair and parts always goes up. You can’t guarantee to find a job to pay for all that after your summer job is finished. BUT all that cost of having a car will still be there.
Rather than getting a car that you like but you can’t afford. Get one that you can afford. At the end of the day, the function of a car is to take you from A to B.
WHEN you have finished your study and have a steady job and a steady income. Then you can get yourself a nicer car.
You should never get a car loan at that age, setting yourself up for financial disaster
In general – I wouldn’t even get a loan for 18K and then pay 8K, would just do the 8K upfront and get a loan for 10K.
But I wouldn’t get a loan without a steady job. Is a car a necessity or a want? Would you be able to save for an extra year? See if you can juggle working + studies? If you can you’re saving extra money to use to buy it without interest. If you can’t then you can quit/lower hours without worrying about car payments
Try the 2nd hand market, Toyota aygo are cheap, high milage per gallon , reliable, cheap to insure and repair. Same with a bunch of other cars. You can check subs and reddits to see what common issues to look out for. Honda civic, prius and I forget the other one that’s rock solid. You don’t want sportyy or expensive, you need a boring solid high mpg shit box. Sports cars have sports car bills and insurance.
Just Google the car and years to avoid. Should help you see common problems.
I am not sure how this works in Europe, but in the United States full coverage insurance has become almost unaffordable for teen drivers. If you buy a car on a loan, you will have to get full coverage insurance (as opposed to cheaper liability only coverage).
I wouldn’t do it because even if you could afford it, the carrying costs of the decision could really stress your budget.
1st car is one that will more than likely get damaged. I’d get a cheap runaround for a good 6 months before thinking about something that’s worth a good chunk of change like that
My genuine question is, can you really not think of anything youd rather spend 18k on than a car?
Absolutely get the car you can buy outright! You’ve not yet met “life’s expenses “ but you have learned to save and that is an essential part of success!
Debt is never your friend! These cats. Come and go and take your money one way or the other .
Get the cash car take good care of it and in the future you’ll have trade in value , more savings and a handle on your income and life expenses and modest car payment would be a breeze !
First time insurance will be expensive especially with your age and the newer the car especially with a loan the higher it gets .
Best of luck and keep saving!
Very dumb. Just buy a cheap used car. I understand loans to buy a house or to invest in a business – not for cars and certainly not as a teenager