Many people will likely still remember getting their first car when they were young. Learning to drive was a stressful time, but passing your test and getting your first car was a thrill.

Depending on finances, most young people get a cheaper car at first as money may be tight. However, some take the option to get car finance instead. Is this, though, really the best option for young people?

What are the options?

If you are looking to get your first car, then you might not have the savings you need to get the car you want. This can mean either waiting until you have the money saved, or getting a cheaper car.

While buying your car outright is seemingly simple and easy as long as you have the money, it can also limit your options. Because saving for a car can take a long time, other options can make it easier. Getting your car through finance from a company such as Car Finance Genie can help you to get a more expensive car while spreading the cost so that it becomes more affordable.

Getting car finance can also help young people develop their credit rating, which will be important when they go on to buy a house and other large purchases. If they can get credit for their car and maintain the payments throughout the life of the credit agreement, then their credit score will go up. This will help improve their chances of getting credit again in the future.

Can young people get credit?

Legally, someone can sign a credit agreement once they reach 18 years old. However, not everyone who is 18 years old will be accepted. It helps if they have been working for a while and perhaps have had other credit agreements such as a mobile phone contract.

While there are no guarantees, shopping around can help them find a credit lender that will accept them for credit. Another factor is the amount they want as finance for the car. If they are looking to borrow more than they can reasonably afford to pay back, then their application is unlikely to be accepted.

Enroll in the electoral register

One of the checks that credit companies use to verify someone’s identity is the electoral register. This is considered as a form of proof that they are an official resident of the address given on the car finance application form.

You can enroll and change your address on the electoral register by going online. This is important if you live with your parents, as proof of utility bills won’t be in the name of the young person.

If they are currently at university, then the young person can change their address on the electoral roll to their temporary residence. This can then be changed again when they leave education and move somewhere else.

What are the benefits of a car finance agreement?

For young people, getting car finance can be better than getting something like a personal loan. Car finance is secured against the car so if the agreement is broken, the car gets repossessed. This is less of a risk than getting a loan from a bank.

Another benefit is that the young person will be able to afford to get a better car because they can spread the payments over a longer period. You should only borrow what you can afford to repay, of course, but the amount that you can afford will be greater if you spread the repayments over time.

Types of car finance agreements

There is more than one type of car finance agreement. Each of them has its benefits.

  • PCP finance stands for Personal Contract Purchase finance and features a balloon payment at the end of the agreed term. Once the term is over, there are three options. The person who took out the finance deal can pay the one-off balloon payment and own the car, give the keys back, or take out finance on another car.
  • HP or Hire Purchase simply splits the remaining cost after the deposit over monthly repayments. When the agreement is completed, there will be no more money needed, and the car will be fully owned by the person who took out the car finance arrangement.
  • All-inclusive finance is only available on new cars and not many manufacturers offer it. With a fixed monthly payment, everything including servicing, insurance, road tax, and warranty is covered. The only thing the person has to pay in addition is fuel.


Getting finance as a young person might be hard. However, with the help of other credit such as mobile phones and credit cards, it might be easier for the given young person to get car finance in the future.


Andrew is a professional writer with 7+ Years of experience. His style and uniqueness inspire and educate readers throughout the world.

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