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Final Spending Spree

For first time buyers the thought of becoming a homeowner and becoming tied down to such a financial commitment can prove too much for some, well 20% of all first time buyers. These 20% of first time buyers feel the need to splash out one last time before the commitment commences. They are said to spend at least £5000 on luxuries such as cars and holidays.

It’s just one last treat before making their final commitment to their mortgage.

Data shows that half of the 20% of first time buyer who splash out will spend an average of £6500 on a car whilst the other half are quite happy to spend up to £2000 on a holiday.

Men are said to be the biggest spenders, squandering an average of £6000, about £1500 more than women. Around 3% of first time buyers can spend an amazing £20,000, which is more than an adequate amount for a deposit on a first house.

Of all those splashing out on a car, most are doing it in the worst way possible; through car dealership financing. Car dealership financing can cost the consumer an additional £2000 - £3000 on top of the car price.

New research shows that around 50% of those in need of finance to purchase a vehicle do so through car dealership financing, which is probably the worst form of financing second to credit cards. These kinds of deals could very well leave first time buyers finances dry as a well and not to mention losing their homes.

The main reasons behind choosing such a poor finance option is simply ‘convenience’ and ‘because the salesman convinced them it was the best deal available’. For those of you who have walked into a car dealership will know the tactics of a car dealer, and will also be aware of how easy it is to get enticed by what appears to be a great deal.

Some even go as far as using their flexible friend to finance a car. This is probably even worse than car dealership financing. Car salesmen seem to be able to almost hypnotize consumers into believing there is no better deal anywhere else. Where the fact of the matter is, you most certainly can.

First time buyers have probably never in their life had the finances or the opportunity to purchase such expensive products such as a house or a car and they simply get carried away, when what they should be doing is taking their time to plan their finances for the present and the future.