Being young driver isn’t great, not only do you have to spend a fortune on your car insurance. (The average car insurance quote for a 18 year old man is £900 per year!) but getting a loan to buy your first car can also be very difficult.
What are your finance options?
The main problem for new drivers is that you generally wont have much of a credit history as you’ve probably not taken out any loans or credit cards until this point. This means that lenders and banks have little credit information to go off when deciding if you are a “safe bet” when it comes to lending you money to buy a car.
Loans – No credit history Vs bad credit history
Lucky for you banks and lenders do treat you differently to those who have bad credit. While as a new driver and have little credit history you are still a higher risk you wont have to pay the same level of interest as someone who needs a car loan with a bad credit history. Lenders generally give you the benefit of the doubt and as new customers they also want you business in the hope you will get a car loan from them in the future!
Get a guarantor
One of the best options for you is to ask your mum, dad or friend to become a guarantor for your new car loan. This means they will be partly responsible for the loan if you were to default in the future. However, once you have demonstrated you can repay your loan within the terms and conditions, next time you would have build up a “credit history” and shoudn’t have any problems getting a car loan in the future on your own without the need for a guarantor. Not only that but you’ll find the rates of interest payable will be lower as you are less of a risk to the bank or lender.
What to do next?
If you are a young driver a new a car loan please speak with us as we have a huge network of lenders that are willing to lend to those with little credit history, either on a guarantored basis or not. Give us a call, what have you got to lose?