First Car Buying Guide

Buying your first car is an incredibly exciting time. Whether you’ve just passed your test, or you’re advancing well with lessons and are planning ahead; you’ll be raring to get going in a car of your own.

That being said, it’s not quite as simple as finding a car you like the look of and snapping it up. You need to ensure that what you buy fits your budget, meets your requirements and ultimately works for you.

In this first car guide, we’ll help you understand what your options are; how to set your budget and the factors you need to consider. We’ve also got some great first car ideas; models we offer that regularly rank among the top 10 first cars in the UK.

Know your budget

When it comes to choosing your first car, you’ve probably already got a price in mind. But there’s more to factor in to your budget than just the purchase price. You may prefer to opt for a slightly more powerful model by using a finance package, and you’ll need to consider any car’s running costs before you deem it to be in budget.

Purchase cost.
If you're a cash buyer, this is the easiest part to get to grips with. You’ll likely have a figure in mind, so can get searching for new and used models within the budget you’ve set aside.

Finance package costs.
Choosing a car financing deal can be really rewarding. On both new and used models, you could spare yourself the hefty upfront cost and stagger your payments over months and years. They offer versatility, allowing you to choose between giving the car back at the end of the contract, or to buy it in full and keep it. Through a finance arrangement, you could drive home in a car you had thought was out of budget.

Once you’ve found a model you’re interested in, don’t hesitate to discuss finance packages with your dealer. They’ll be able to outline what your payments would be, allowing you to budget.

You can find out more by reading our car financing guide.

Insurance costs.
Because inexperienced drivers face higher premiums, this is particularly relevant to you. In fact, your insurance costs could end up exceeding any finance package payments at this early stage of your driving life. Make sure you get a few quotes from insurers before you’re certain that a particular model fits your budget.

Fuel costs.
Without the funds to fuel your car, you won’t actually be able to use it. By considering the fuel economy and fuel type of any model, you should be able to get an idea of how much it’ll cost you to keep the car going. If it sounds like it’s going to squeeze your monthly budget; particularly when insurance and finance package payments are factored in, it might be worth considering a more economic model.

Tax (VED) costs.
Unless you’re buying a fully-electric, zero-emissions vehicle, you’ll have to pay road tax. If you’re buying a used car that’s been on the road before April 2017, your annual rate will be based entirely on the car's emissions. This means there’s an obvious financial reward in seeking out similarly-priced but lower-emissions alternatives, if you feel the VED is too high on a particular model.

Things are a bit more complex if you’re buying new or nearly-new. These cars are taxed on emissions in the first year, followed by a flat rate thereafter.

Once you’ve set your sights on a particular car, you’ll be able to use its model and age to work out how much VED you’ll be paying. Then factor this in alongside your other costs, to check this vehicle fits your budget before you go ahead and buy.

Choose a model

The model you go for has to be economical, and the hardware has to be suited to the task at hand, but it also needs to be practical. Once you’ve got your budget in mind, have think about how you’ll use your car and what you need from the model itself.

Safety.
The reality is that, as an inexperienced driver, you are more likely to be involved in an accident. You should never let that put you off hitting the road with your new-found sense of adventure; but it probably means it’s worth paying more attention to any model’s safety record than a typical driver might.

The most popular models on the road are all assigned a Euro NCAP star rating out of five. To be awarded a rating, models will have undergone a range of real-life crash test scenarios, and have had their damage and ability to protect occupants and passengers assessed. Good beginner cars to have received the top five-star rating include the VW Polo and the Toyota Yaris.

Space and seats.
Owning your first car opens a whole world of opportunity, so the last thing you want is a lack of space cramping your style, stopping you from doing some of the things you’d like to. At the same time, though, go too big and you’ll most likely find yourself with a model in a high insurance group. Factor in your inexperience and you could end up with some eye-watering quotes for insurance.

The main thing to consider is how important it is to you that you’ve got room for four or five people; or if you’re satisfied with two. Only you’ll know whether opting for something super small will leave you feeling limited, or make total economic sense.

Insurance group.
For experienced drivers seeking out a new car, how any given model will affect their insurance rate is something of an afterthought; but as a first-time buyer this must be at the forefront of your mind when choosing. Unless you’re prepared to pay really high rates, you’ll want to focus on the models in the lower half of the groups; but ideally in groups 1 – 10. Models like the Toyota Auris or the Volkswagen Up! fall into the very lowest categories.

Power and ability.
Let’s face it, it probably isn’t worth you splashing out a fortune on a hugely powerful car if you’re only going to be using it to hop around town and get to-and-from the office a few miles away – for the foreseeable future at least.

Similarly, buying a used car that’s not got much life left in it, when you’re going to be driving 60 miles to work each day, could come back to bite you. Choosing a model that suits your primary purpose for driving means you’ll get the most out of your car in terms of performance and economy.

Fuel Type.
It wasn’t long ago that hybrid and electric cars were beyond the budgets of most first time car buyers. But with these models increasingly affordable, and offering delightfully low running costs, they’re more of an option than ever. Once again, you’ll have to think about how you use your car day-to-day to decide what’s practical. Diesel cars are best suited for long commutes at high speeds, while petrol models are best for hopping around town. Hybrids can offer the best of both worlds and make sound economic sense, while running an electric is exceptionally cheap; with no VED to pay and a full-charge costing just a few pounds a pop. Just remember that electric cars are limited by their range – so if you’re constantly criss-crossing the country this may not be practical.

New or used

The discounted prices offered on used vehicles can be appealing, particularly if it’s to be a first-time car. Both buying new and choosing used have their benefits and drawbacks. Here we’ll outline a few that are relevant to you, to help you make your mind up.

Used

Pros:

  • Cheaper to buy. Used cars are undoubtedly cheaper compared with their new counterparts. Cars depreciate quickly, so you could end up receiving a major discount on a vehicle that’s just a few years old.
  • Could be cheaper to insure. With the car’s value having dropped, the amount insurers would have to pay out if you were to write-off the car drops too. They may respond to this with lower premiums; however this is not a blanket rule so don’t assume.
  • Fewer upfront costs. When you buy a used car, you won’t need to worry about things like dealer delivery or the potentially-pricy first year VED that new cars face.
  • Little depreciation. After a car’s first few years on the road, the rate of its depreciation slows dramatically. That means you could sell a used car on after a few years with it only have lost a little value, as opposed to new cars which see their value drop sharply.

Cons

  • MOT and repair costs. Once a car is more than three years old, it must have an annual MOT test. The test itself costs in the region of £50, but if any problems are found you’ll have to pay for the repair of these too. You won’t be able to drive your car away from the test centre until it passes. Similarly, as cars age they’re more likely to breakdown and suffer issues; the older a car gets the more you should expect to encounter repair costs. Read our MOT guide to find out more.
  • Wear and tear. Over time, cars do begin to show their age. Even if you’re sure it’s got many years ahead of it yet, any used car you look at will show natural signs of wear and tear. The best way to tell how much life is left in a car is to see how many miles it has on the clock.

New

Pros

  • Freedom to choose. When you buy a new car, you’re free to make all the decisions yourself. From optional extras to trims and colours, you’ll get exactly what you were looking for.
  • New fuel/power options. There are more hybrid and electric cars on the market than ever before. In buying new, you’ll be free to pick all the latest innovations, which could see your running costs slashed.
  • Warranty. For the first few years of your car’s life, it’ll be covered by its manufacturer’s warranty. This will save you from any potential repair costs should you encounter them. You also won’t need to get an MOT test during the first three years on the road.

Cons

  • More expensive. There’s no doubt about it; buying a car as new is much more expensive. Not only will the model itself cost more, but your insurance premium would likely be higher and you’d have to pay your first year VED rates in line with the car’s emissions.
  • Depreciation. During a car’s first three years on the road, its value drops dramatically; potentially by half. This means you’ll see a much smaller return on your investment when it comes to selling. Meanwhile, deprecation tails off for used vehicles, so a much smaller share of value is lost to depreciation.

Getting Insurance

By law, you must have a car insurance policy covering your new vehicle before you’ve even hit the road. But don’t let that pressure you into snapping up the first quote you get without comparing some of the alternatives.

As you’re an inexperienced driver, you’ll be quoted a much higher premium than your more experienced counterparts, particularly if you’re in your teens or twenties. This is because statistics show young and inexperienced drivers are much more likely to make an insurance claim, and so insurers increase their premiums as a result. There are three main types of car insurance:

  • Third party. This is the minimum insurance you are required to have by law. It will cover the cost of any damage or injury that’s caused by you or your vehicle, where you’re deemed to be at fault. It will not cover you or your car.
  • Third party, fire and theft. Much the same as third party, this form of car insurance also covers you if your car were to be damaged by far or stolen. It still won’t cover any damage to your car that’s your own fault, or and of personal injury costs.
  • Fully comprehensive. This option covers you in all scenarios; both damage or injury to third parties, as well as you and your car.

Historically, third party was the cheaper choice. It was often well suited to new and younger drivers, who weren’t driving a particularly valuable car and were only using it as a nifty get-around. However, the insurance industry has noticed that drivers with this form of insurance make more claims. As a result, the more extensive coverage of fully comprehensive could actually be the best first car insurance.

While you can’t do much about your age and inexperience, there are other things you can do to lower your premium if you’re worried about insurance costs.

  • Add an experienced driver to your policy. By including a parent or older sibling as a named driver on your insurance policy, you’re likely to receive a lower premium in return. Insurer’s see the presence of a more experienced driver as a reduction in risk. You must never name them as the main driver if the car is to be primarily driven by you though; this is a form of insurance fraud known as ‘fronting’; and could result in prosecution.
  • Choose a low insurance group model. When buying your first car, check the insurance group of any models you’re considering. This is a rating system created by the ABI, that takes into account a model’s overall value, parts costs, repair time and safety record. Group 1 receive the lowest premiums and 50 the highest.
  • Consider black box insurance. This is a fairly recent development, but it’s proving popular. It uses a device within your car to send your insurer information on how you drive. If you’re a safe driver and don’t take risks, this could be rewarding. In absence of years of records on your driving, insurers can use this to analyse your likelihood of making a claim, and may cut your premium as a result.

To find out more about car insurance, read our dedicated car insurance guide.

First car recommendations

In terms of value for money, road-faring credentials and affordability; here’s a handful of cars we’d happily recommend to first time car buyers.

Volkswagen Polo

Better than ever, it’s easy to see why the Volkswagen Polo is one of Britain’s most popular cars. Small and sporty but with plenty of space to enhance your lifestyle, it’s a car that doesn’t quit. Its low insurance grouping makes it an ideal first car, and it comes with plenty of special touches to keep you entertained.

Find out more >

Toyota Aygo

From the minute you spot its striking X-shaped grille, the Toyota Aygo is all fun. With plenty of customisable extras, it’s delightfully economical and can take on almost every challenge; but is most comfortable tackling your short urban drives. There’s both a 5-door and a 3-door version available for added practicality, while its compact dimensions still leave plenty of room for luggage in the back.

Find out more >

Volkswagen Up!

Available in seven unique trims and four engine options, the Volkswagen Up! is a car that can be tailored to you. Renowned for its city car credentials, it takes the urban drive in its stride, with its compact size placing it among the most agile in its class. That’s not to say it doesn’t pack plenty in though, there’s enough room for five passengers and its interior is fitted out with all the latest tech.

Find out more >

Book a test drive

If any of these models catch your eye, or you’ve something else in mind, don’t hesitate to contact us today and arrange a test drive. Our ‘Drive it Your Way’ test drive experience gives you all the time you need to really get a feel for the model; trying out different environments and getting to use all the innovative touches.

If you’re wondering where to buy your first car, look no further than Inchcape. As approved dealers, you can find our retail centres right across the country, with an extensive range of new and used cars in stock at all times.