When buying your first car, there’s plenty of things to consider. But as a first-time driver, it can be notoriously difficult to choose: you don’t know what you don’t know.
Even those without much car know-how should be able to feel confident making a purchase. In this blog we’ll look at:
- Budget
- Age
- Mileage
- Engine size
- Insurance band
- MOT history
So whether you’re limited by budget or are a car enthusiast set on a specific make and model, we can help. Our guide to finding the best cars for new drivers will help you to determine whether the purchase you’re planning is the right one for you.
How old should your first car be?
Although age might feel like an important factor, what you should be looking at is mileage and condition. A ten-year-old car with low mileage and only one previous owner is likely to be a better buy than a 4-year-old car with several owners and thousands of miles on the clock
Although it’s generally thought that you should avoid a car with over 100,000 miles, it isn’t necessarily a bad investment. As long as the car is well-maintained, a high mileage won’t necessarily affect day-to-day driving. However, buyers of used cars typically look for lower mileages, which means that their potential resale value may be higher.
How much should your first car cost?
Your personal finances are likely to be the driving factor in how you determine your budget.
Buying a used car
If you’re looking for a cheap runaround — something to get you from A to B whilst you build up your confidence — you may want to set a budget of around £1,500 or less for a used car. Buying from websites like Autotrader is generally thought of as ‘safer’ than Facebook Marketplace or Gumtree, but in reality, any large purchase to a stranger will have an element of risk.
Know how to assess the car to work out whether it’s a good purchase too. If you’re not confident, hire a mechanic to do a pre-purchase check.
Buying a new car
There are many ways to purchase a car. The cheapest way to buy a car is to pay it all upfront, as you won’t need to pay interest on your finance loan. However, for many people, this is out of the question.
Instead, most people choose to buy new cars via Hire Purchase or a Personal Contract.
Hire Purchase
Hire Purchase (H/P) is one of the most popular ways to finance a car. In this instance, you’ll secure a loan against the car. You’ll pay a deposit of around 10% of the purchase price and then make fixed monthly payments over an agreed period. You will not own the car until the last payment is made, but will be responsible for tax and MOT.
Hire Purchase deals can be very competitive on new cars, as they are arranged by the car dealership. It is a good way of spreading the cost of a more expensive vehicle if you can afford the monthly repayment plan.
For a £25,000 car, you would pay a £1,000 deposit, with monthly payments of £471 and with an optional purchase fee of £200, costing you around £29,504 after interest.
Personal Contract Purchase
Similar to hire purchase, you’ll pay a 10% deposit with a Personal Contract Purchase (PCP) deal and then will make lower payments every month. However, the overall cost of what you pay may be higher than hire purchase.
PCPs work by getting you a loan for the difference between the car’s price brand new and the predicted value of the car at the end of the contract. This amount is calculated by annual mileage over the term of the agreement. At the end of the process, you can trade in the car, hand the car back to the dealer, or pay a final payment and keep it.
For example, for a £20,000 car, which the finance company calculates will be worth £8,000 after three years, you would pay a £2,000 deposit. You would pay around £278 per month for three years until the end of the agreed term.
Leasing a car
If you’re on a higher budget, buying or leasing a car could be a good option. With leasing, after agreeing on mileage with the provider, you’ll pay a deposit and then a fixed monthly amount until the lease contract is up. At this point, the car will be returned to the finance company.
Cars are generally a bad investment, as they are known to depreciate rapidly in value. Leasing is a great option for those who aren’t set on owning their car outright.
Expect to pay a deposit of around nine times your monthly cost: for example, a £900 deposit and £150 monthly cost is usual.
How big should the engine be?
As an inexperienced driver, you may find that a car with a smaller engine is cheaper. Keep the engine size 1200cc or less to keep tax and insurance costs down. Make use of price comparison sites to see how much cars of different engine sizes might cost to insure.
Should I choose petrol, diesel or electric?
What type of fuel engine you choose will depend on what you require from your car and what is available on the market when you are looking.
Petrol and diesel cars are the most popular, although both have their downsides. Electric and hybrid-electric cars are becoming more popular. However, they are reliant on battery charging points which are often not readily available.
Pros and cons of diesel:
| Pros | Cons |
|---|---|
| Diesel engines are more efficient | More expensive at the pump |
| May have a higher resale value | New diesel cars have a higher tax |
| Diesel cars have better overtaking power and towing ability | Low emissions zones will make it more expensive to drive diesel in cities |
| Lower CO2 emissions | Diesel fuel produces particulates that are linked to asthma |
| Diesel engines may be noisier than petrol | |
| Diesel cars can be expensive to buy and service | |
| Diesel is from a non-renewable source and is therefore not sustainable for the environment |
Pros and cons of petrol:
| Pros | Cons |
|---|---|
| Cheaper than diesel at the pump | Engines are less efficient than diesel |
| Petrol cars are cheaper to buy and service | Petrol cars emit more CO2 than diesel |
| Petrol cars produce less nitrogen than diesel | Petrol engines require regular gearing-up to utilise the engine’s power |
| Cars tend to be less noisy than diesel | Petrol is from a non-renewable source and is therefore not sustainable for the environment |
Pros and cons of electric:
| Pros | Cons |
|---|---|
| Zero-emission fuel | Lack of charging points |
| Low running costs | Battery range may be a nuisance |
| Tax benefits and incentives | High purchase price |
| Smooth acceleration | Cost of installing a charging point at home |
| Plan your journeys around charging points | |
| Plan your journeys around charging points |
What insurance group should your first car be in?
There are many ways to bring down the cost of your car insurance, and choosing a car in a lower insurance group is one of the main ways to save.
There are fifty insurance groups in the UK market.The lower the insurance group, the less the insurance cost is likely to be. For example, cars in Group 2 are cheaper to insure than cars in Group 19.
Inexperienced drivers of any age can keep costs to a minimum by choosing a small car in Group 1 or 2.
How to get the cheapest insurance for your first car
The best way to get cheap insurance for your car is to shop around. Use price-comparison tools to work out which is the best deal for you. Answer all the questions truthfully — if you don’t, you will invalidate your insurance, and you’ll be classed as driving illegally.
If your quote looks high, you can:
- Add a voluntary excess: This refers to an amount that you will pay on top of the compulsory excess if you need to make a claim.
- Choose a black box telematics policy: Your insurer will track your car and reward you for safe driving.
- Add a named driver with more experience: Make sure they drive the car regularly, otherwise, this will invalidate the policy.
For more tips on how to save, see our in-depth guide to getting cheaper insurance for your first car.
Choosing your first car
Although choosing your first car can be a stressful process, if you do your research, consult an expert and understand your needs, you’ll be able to find the perfect car for you. Whether you’re looking to save money on your first car or want to treat yourself, remember that one of the best ways to save money (on both insurance and maintenance) is to drive safely.