Real Accounts: Ann Talks Financing Her First Car
When it comes to saving, spending and lending, everyone’s got a story to tell. In our new series Real Accounts, we talk to different millennials about their (very) personal finance experiences and some of the key lessons they’ve learned along the way.
This week we chat to writer Ann about feeling like Bruno Mars in the 24K Magic video clip, when the cash arrived in her account to buy her first car — and the personal loan that helped it get there.
I was 20 years old when I bought my first car. Just like any other girl my age, I felt like I needed a good 4WD to get me from A to B. I was working full time in retail and living at home at the time. Getting a car seemed like a good way to assert my independence. Show my parents I could do things on my own, and all that jazz.
I decided that a personal loan was the best way to fund the purchase. I figured it would be easier to pay off. But in fairness, I really didn’t know much about the other options. I knew as much about financial services as a young 20-year-old girl knows — just about nothing at all. I applied for the loan through my bank on the advice of my friends.
I was lucky enough to get the car at a discount. My boyfriend helped me negotiate the price down. While it was tempting to use the money I’d saved on clothes, I instead used it to pay for my rego, insurance and CTP. The rest went back into paying off the loan (as advised by my boyfriend and parents).
Listening to the people around me served me well. Their advice helped me negotiate the price of the car down, and stopped me from splurging the rest of the cash. Although, it was very tempting. A new handbag would’ve been nice.
I took an extra job to help me pay off the loan. Initially, I budgeted to pay it off in seven years, but I ended up paying it off in five. I’m pleased I payed it off quickly, and had a responsible mindset.
Here are five things I learned from my experience:
- Have a good support system around you - friends and family that put you in line when you just want to go crazy and buy Prada bags
- Only apply for the amount you need
- Make sure you have a stable income
- Focus! Focus on paying off the loan as quickly as possible – any extra cash should go in the bank. Trust me, you’ll feel better in the long run
- Save. Want to buy that Tigerlily dress while you have a loan? Put money aside every week to buy what you want.