Before you start browsing for the 'one', think about what you really NEED from a car. There’s no point buying a two-seater convertible if you’re about to start a family, so work out what's realistic. Ask yourself:
- What are my essential requirements? Enough room for the family? A cheap car to run? A sporty number? Think about what you need...
- Do I need the car to do anything specific? This could include towing a trailer or fitting into a small space.
- Is it for short city drives or longer motorway journeys? Does it need to be able to cruise at motorway speeds without straining?
- What's better, petrol or diesel? The fuel you want to use can make a big difference in the model you might choose.
- Do I need a massive boot? Consider whether you need room for things such as sports equipment or a pushchair – or if you need to fit friendly Fido or your meddling mother-in-law.
- Do I want to consider an eco-friendly car? If so, a hybrid or electric car could be an option. The cost more to start with but some come with Government grants, eg, the BMW i3 has a £5,000 grant.
Before you start doing your sum you need to decide what car you want.
There are two sorts of costs you need to budget for: upfront and ongoing. Check you've thought about all of the following and budgeted for them:
- Any upfront costs. Once you've decided to buy a car, you will of course have to pay for it. You can either pay the whole cost upfront or take out a finance deal. Whichever way you choose, expect to at least pay some kind of down payment before you drive off.
- Finance repayments. If you've taken a personal loan, or dealer finance, you'll need to factor in repayments – read more on your finance options.
- Fuel. To work out the rough cost of running a new car, the Gov.uk website has a fuel consumption search tool. Motoring website Honest John also has a handy 'real MPG' section where drivers have reported how many miles per gallon they actually get. See our Cheap Petrol Guide for how to cut costs.
- Tax. You can check out how much road tax you'll need to pay on the Gov.ukwebsite. You can also search for cars in a particular tax band (A-M depending on the car’s CO2 emissions). The cost of tax range from £0 to over £1,000 in year one. Standard rates then apply, at up to £500/year.
- Car insurance. The cost of insurance is based on how much of a risk insurers perceive you to be. Eg, if you are a youngster who's just passed your test, you will pay more for your cover. Plus, taking breakdown cover will bump up the cost. New cars often come with a year’s worth of breakdown cover. See our Cheap Car Insurance and Breakdown Cover guides for tips on how to cut costs.
- MOTs. Once the car's three years old, you’ll have to pay for an MOT every year, which costs £54.85 (for the test). Use our MOT guide for MoneySaving tips, including getting the test at local council centres, which could save you £100.
- Servicing. You'll need to get your car serviced regularly, typically once a year, though it varies by model. Servicing ensures it’s safe to drive and keeps the manufacturer’s warranty valid. A routine service typically starts around £120.
- Parking permits and tolls. Unless you have free parking where you live, or a garage, you will probably have to pay for a resident’s permit. Check your council website to see how much this costs. Consider any costs to park at work if you drive there too, as well as toll charges you may face along the way.
- Other spending. New tyres, repairs and valet cleans can add up, so make sure there’s some breathing room in your budget. So allow a couple of £100s extra for additional spending per year – just in case.
and finally Check as many dealerships as possible and pit them against each otherAsk all the dealers in your area for their best deal on your second-hand car of choice. If you’re prepared to travel far and wide to find a rock-bottom price, expand your radius. Make a note of the best price, and ask others to beat it.
You can always go back to your local dealer to ask if they’ll match the best offer. They might be keen for your cash, and happy to offer the same deal.