Credit history: 18-year-olds typically have a limited or no credit history, which can make it harder to get approved for a loan. However, there are lenders that specialize in providing car finance to young drivers, and they may be more willing to consider applicants with a thin credit file.
Income: Lenders will also want to see evidence that you have a steady income to repay the loan. This could be from employment, self-employment, or other sources. If you are a student, you may need to have a guarantor (such as a parent or guardian) who is willing to co-sign the loan.
Affordability: Lenders will assess your affordability to ensure that you can afford the monthly repayments without getting into financial difficulty. This will include looking at your income, expenses, and other debts.
Interest rates: Interest rates on car finance for 18-year-olds are typically higher than for older applicants, reflecting the higher risk involved. It is important to compare interest rates from different lenders before making a decision.
Deposit: A larger deposit can help to reduce the amount you need to borrow and improve your chances of getting approved. If you have saved up a deposit, it is worth considering using it towards the purchase of a car.
PCP (Personal Contract Purchase): PCP is a popular way to finance a car, especially for young drivers. With PCP, you make monthly payments over a fixed term, and at the end of the term you have the option to either make a final payment to own the car, return the car to the dealer, or trade it in for a new car.
It is important to carefully research and compare different car finance options before making a decision. You may want to consider getting quotes from multiple lenders and talking to a financial advisor to ensure that you are getting the best deal possible.
