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Why shouldn't I get a car on finance?

So I'm 18 just passed my test and everything and I want a new car, or used but in the last 5 years new. I have worked it out and I can afford a car on finance with insurance for the next 3 years without any problems so why are people still telling me not to do it?! I understand that you end up paying £2-3k more but I don't actually mind! The particular car I want has cheap insurance too! Any ideas?
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Maker
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Go ahead if money is not an issue, used cars are always a gamble in case they go wrong. Some new cars have really long warranties so takes the worry out of them. I would never buy a new cat but millions of people do obviously.
In one word: debt.

Circumstances change unexpectedly and with unforseen consequences. You could easily find that what seemed within your control at the start, rapidly escalates beyond.

For instance, you may lose your income through no fault of your own or your disposable income (car finance) becomes unmanageable. The bank base rates will rise and with it, your monthly payments. A trivial 1% increase in base rates (very easily possible) could see the interest you pay on your loan increase by 30+ %.

You may find yourself having to support other family members through a change in their circumstances.

The car is not yours until you make the final payment. Which means if you default on your loan, it will be repossessed and any legal costs and expences will be added to your debt. This could add up to force you into insolvency and even bankruptcy. Any default in your monthly payments will be recorded on your credit file as and places any new loans or mortgage application in serious jeapardy.

If the car is stolen or you have an accident and the car is written off (does not need to be your fault), the insurance loss adjusters will only pay out the calculated second hand part exchange market value less wear/tear etc., and not the full new cost value of your car. Meaning you still have to pay out the difference (which could easily amount to several thousand pounds). Your loan payments will still need to be serviced even though you no longer have the car.

Add to this any early redemption loan costs and you could so very easily find you still owe the full value of the car, but only get back less perhaps less than half the loan debt.

A new car sounds great until you make a claim and that cheap insurance and low interest rate suddenly becomes a noose with a large rock strapped around your neck.

It's for good reason the old nickname for hire/purchase and loans is termed buying something on the 'never never'.

Be warned.
Can you actually afford it? I used to know someone who has a car on finance. He's now in **** loads of debt because of it. But he's stupid enough to get a car on finance whilst not working, somehow. Mum and sister have had no problems; but they did part exchange their cars.

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