autosPersonal Finance

How Can Young People Afford a Car?

How can Young People Afford a Car?

For new drivers heading out onto the road for the first time, the cost of the vehicle itself can be a significant expense – and that’s before you even consider the added expense that comes from fuel, maintenance, and replacement tyres.

While you might be tempted to cut corners and go for something that’s on the verge of falling to bits, doing so might well be unwise. A car of this sort will end up costing more in the long-run, as it’ll require more frequent attention. Plus, it’ll be difficult to move on when you determine that you want to make an upgrade.

It’s also worth thinking about longer-term trends. The car market is now in a state of transition. The government has expressed an ambition to ban the sale of petrol and diesel cars by 2030 – and thus, hanging onto a car for years on end might not be a feasible option.

An alternative comes in the form of leasing. You can think of this as borrowing the car for the long-term, perhaps with a view to ultimately owning it. Younger drivers might not have built up the necessary credit history to be trusted with an asset as valuable as a car – but you can appoint a trusted party to act as a guarantor – they’ll step in if you can’t afford to pay.

What About PCP?

Another form of lease is a personal contract purchase, or PCP. This arrangement sees you buy the car in instalments over a long period, meaning that you’ll eventually own it. There’s a little bit more complexity to navigate here, as your payments will factor in depreciation over time.

Insurance

Every car on British roads is legally required to be insured. Sometimes, insurance is thrown into a leasing package – but this is the exception rather than the rule. It’s worth thinking about GAP insurance, too. This will cover you for the full value of your car should it be stolen or written off, and will protect you against depreciation.

Leasing Tips

To get the best from your lease, you’ll need to ensure that you return the car in a respectable condition. Your contract will protect the provider against wear and tear in excess of what’s reasonable. You might also have to agree to a mileage cap for the year – be realistic when you set this, as exceeding it will cost you more in the long-term.

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.