Your first car budget is extremely high, however just go for the one you pay the least interest on. Either way you're going to be paying back monthly.

I find owning the car better as it's yours and you can do what you want. But financing it's still the dealers until you pay it off unless I'm getting confused with leasing again.

Probably best going on finance and you are getting ripped off £2.3k for a 1.0L, find another insurance company, remember to ring them as you will get a better quote. Nice first car btw

That's crazy for insurance. If you don't care what the car looks like just get a cheap hatchback with low miles, there's no point buying a Polo for 8 grand when it will be worth 2k in a couple of years.

Also, dealerships rip you off, I always buy from private sellers and you can get a vehicle inspection if you want. Just my opinion.

I'd always go finance through the dealerships, can get good deals on services, MOT's etc. Go for a look and see what you like and price up insurance. 2.3k is a rip off, do not pay that! My first car when I was 18 was a 1.4 Fiesta and I was £1400.

Shop around man, keep us updated.

Visxal wrote Probably best going on finance and you are getting ripped off £2.3k for a 1.0L, find another insurance company, remember to ring them as you will get a better quote. Nice first car btw

Polo R-Line. It'll be because of the specs of the car.

Buy it and that insurance price is LIIITTEE compared to mine lol

Either way you're taking out a loan weather it's though your bank or a bank that the dealer finds. The only difference is the dealer is SUPPOSED to only pull your credit report once, send it to their network of banks and wait for their "bid". Sometimes your credit gets pulled a million times and destroys your credit.

On the other side of things, if you've been with your bank for a while they will probably give you the best deal because they can analyze your spending habits. When I bought my truck the lowest rate the dealer could find me was 13 something% but my bank which is also a credit union has all of my debts and credit history so they know my finance history and got me to 10.74% (literally no other credit).

Always buy USED and pay in full

3PT wrote Always buy USED and pay in full

No and no.

While a used vehicle will be cheaper you will not get all the benefits of a new vehicle such as free maintenance for 5 years (often times for the whole time you own the vehicle) as well as the warranties. This isn't to say finance a $12k vehicle when you were planning to outright own one for $2k, I'm saying stay in your price range. Don't go older and used for more options, go newer for the piece of mind and remember you can buy those options off Ebay.

For the finance vs paid in full it depends. Let me break it down with numbers from my position. I took out a $10k loan at 10.74% for 5 years. I can either pay it off today and be strapped for cash but own the truck, or I can pay it off in 5 years. In 5 years at the end of my loan I will have paid $12,968, so almost $3k in interest in 5 years. However you can count inflation rates and argue that the $3k in 5 years is only worth $2,750 or what ever the math would be, but let's go with $3k. Can I spend that $10k over 5 years to make more than $3k? This doesn't have to do with buying and selling stuff but it can be as simple as buying in bulk. For it to be worth it I'd have to save or make $1.64/day for 5 years which is pretty easy. I'm not saying I can't do it with having the truck paid off, I'm saying it's easier to do so with the $10k in my pocket, plus I have a cash safety net if the economy goes bust or the truck breaks down.

PLOT TWIST!!! You settle down with a girl / guy and you want to buy a hose. You can't because you spent all your money on your car to pay it off so you have no money for a down payment.

Let's work on the same numbers in a different way. I have my $10k loan, but I pay $5k off right now. That means I only owe $5k which brings the amount of interest I pay down to $1,484. That's a very small number to spend over 5 years which is good because now I'm not paying much to keep money in my pocket and I have a cash safety net still.

Also keep in mind that financing your car gains you credit so around year 2 or 3 you could refinance the remainder of the load for a lower interest rate. Everything goes hand in hand with that too, you need credit to get a house, any sort of a loan, a good credit card, even some jobs require a good credit score.