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Car finance quotes for 18-year-olds
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Car finance quotes for young drivers
Everything you need to know about car finance for 18-year-olds
As a young driver, working out how to finance your new car can feel daunting — especially if you’ve never owned a vehicle before! But young drivers don’t need to feel side lined, you can still find great finance deals that work for you.
If you’re feeling unsure about car financing options, then here’s everything you need to find the right funding option for you!
What is car finance?
Car finance allows you to purchase a new car without having to worry about paying a lump sum upfront. Depending on the type of finance you choose, you’ll either borrow a fixed amount to cover the cost of the vehicle, or you’ll set up a purchase plan with your dealership of choice.
What types of car finance are available?
When it comes to car finance, young drivers have three main options.
The first is a personal loan — where you borrow enough money to pay for your car upfront. You’ll repay this money over time, and will need to pay interest, too.
You could also choose a Hire Purchase (HP) or Personal Contract Purchase (PCP) arrangement. Both plans will require an initial deposit, and regular payments that allow you to use a car as your own. At the end of an HP plan, the car will belong to you, but a PCP will require you to return the car, or pay more to own it outright.
What car finance options are available for 18-year-olds?
As long as you can prove your citizenship and income stability to a lender, you can access the majority of car financing schemes as an 18-year-old in the UK.
What car finance options are available for 17-year-olds?
Unfortunately, under-18s cannot access car finance in the UK, so if you pass your test at 17, you’ll have to wait to apply for financing.
If you need a car urgently you may want to consider borrowing money from a loved one, but you should ensure that all parties understand the repayment terms before you commit to anything.
Is it harder to get car finance for young drivers?
As many young drivers have little to no credit history, they can find it harder to successfully apply for car finance. Many banks and lenders will prioritize giving loans to older drivers who have a long credit history and high credit scores, as it’s a good indicator that the loan will be repaid on time.
What should I do if I’m a young person with no credit history?
If you’re a young person without any credit history, there are a few ways to increase your chances of getting approved for car finance.
First, consider taking a personal loan with a guarantor, which is someone that co-signs for your loan, and agrees to repay the debt in the event you’re unable to.
Alternatively, if you’ve chosen an HP or PCP plan, you might want to offer to pay a higher initial deposit. This way, you’ll have less to repay during the contract, which can reassure your lender.
Finally, it’s a good idea to constantly work on building up your credit score. Don’t spend more on your credit card than you can afford, and make sure to pay all bills on time, as this can really benefit you in the long run.
What other costs should a young driver consider?
As a young driver, keep in mind that your monthly insurance payments and annual MOT and car tax bills will be non-negotiable, so always budget accordingly.
You’ll also need to pay for any repairs or maintenance your car needs, and of course cover the cost of fuel. Depending on where you live, you may need to pay for a parking permit, or rent a parking space.
Many young drivers also opt for breakdown cover. You’re bound to need it at some point, and it works out a lot cheaper than paying for emergency assistance.
*Representative Example – Personal Contract Purchase: Cash Price £15,000.00, Deposit £500.00, borrowing £14,500.00 over 4 years at 8.9% Representative APR (fixed). 47 monthly payments of £228.99 followed by a final payment of £7,560.00. Total cost of credit of £3,832.53 and total amount payable of £18,832.53. Based on 8,000 miles per annum, excess mileage charges will apply if this is exceeded. Finance subject to status 18+ only. We are a credit broker and not a lender. Magnitude Finance is a trading style of DSG Financial Services Ltd. DSG Financial Services Ltd is a company registered in England & Wales with a company number 02313903. Our VAT registration number is 511678843. DSG Financial Services Ltd is authorised and regulated by the Financial Conduct Authority under firm reference number 649675