Complete guide to buying your first car

If you’ve recently passed your driving test, you’ll no doubt want to dive straight into buying your first car. It can be a really exciting time but buying a car will be one of the biggest purchases you will make in life so it’s important it’s an informed one. Buying a car can be an easy and simple process but not knowing a few handy tips first could leave you out of pocket. Read our top tips on how to get the right first car for your budget!

Budget carefully

As with any big purchase, the first place you should start is with your budget. Not only will you have to think about how much you can afford to pay for a car but also your car insurance, road tax and running costs should be factored in too.

When you budget for your first car, you should research the below:

• Either a lump sum cash payment or monthly budget for finance.

• Car insurance costs (annual or monthly payments).

• Road tax costs of your chosen car.

• Running and maintenance costs.

Buying a car with cash

The best way to buy your first car is with cash. This is because there’s no interest to pay on monthly payments and you’ll own the car from the start of the deal. However, it can be hard for first time car buyers to save up enough money to put down a lump sum for a car as even second-hand cars can be expensive to buy outright.

Spread the cost with car finance

If you can’t afford a lump sum payment to buy a car, you may be looking to use car finance to help spread the cost. Car finance is subject to status, and you will need a lender to agree to accepting you for a finance deal first. If approved, you can finance a car that suits your monthly budget and pay for it over a number of years. Your car finance budget should be realistic and as a general rule you should only spend around 10% of your monthly income on a car payment.

Compare car insurance costs

First time drivers face some of the highest car insurance costs around. This is because newly qualified drivers are more likely to have a road accident within the first year of driving due to lack of driving experience. There are also other factors which help to calculate how much you pay for car insurance such as the type of car you choose, where the car will be kept, your mileage, your age and even your occupation. You should compare car insurance quotes for cars you think you could afford to see how much you would be looking at for insurance. You can also choose to spread the cost monthly or pay for your insurance in one annual payment. Paying monthly is usually more expensive as the insurance provider may charge you interest for doing so.

Vehicle Exercise Duty (road tax) payments

In the UK, all drivers need to pay Vehicle Exercise Duty on any vehicle driven on the roads. How much you will pay for annual road tax will depend on the car you choose. It can range anywhere from £0 to £2,000 in the first year, depending on the tax bracket in which the car falls into. The average driver pays around £190 per year for road tax but there are more and more cars which are exempt from paying car tax. It can be worth researching cars which have a low tax band to help save money.

Running and maintenance cost

Once you’ve bought the car, insured it, and taxed it, you’ll need to have some money to keep up with running costs too. Running costs can include either refuelling your car with petrol or diesel or recharging a hybrid or electric car. Electric cars can offer the lowest running costs as it costs much less to recharge a car than it does to refuel but they may not be suited to drivers who cover many miles. Your maintenance costs can include things like servicing your car and getting an annual MOT.

Choosing a body style

Once you’ve set your buying budget and running costs, it’s time to find your car! It can be a good idea to explore different body styles to suit you. Usually, small city cars make great first cars because they’re cheap to buy and run. If you need something with more space, SUVs make the best family cars for you and your tribe. First time drivers now have seemingly endless choice when it comes to choosing a body style and a crossover car can be good if you want the look and feel of an SUV but with the lower running costs of a small hatchback.

Find a reputable seller

Once you’re ready to start shopping for your fist car, it’s important you buy from a reputable seller. Before you buy a car from a private seller or dealership, you should always do your research first. Read reviews to see what type of seller they are and get an idea of other buyer’s experiences too. When you buy with cash, you’ll have the freedom to buy from a private seller or a car dealership. Private sellers can be easier to haggle with, but you don’t have as many rights as you would when buying from a dealership if something was to go wrong with the purchase. You also have to take the car at face value when you buy from a private seller.

You can’t buy from a private seller if you get a car on finance and usually are limited to dealers which are verified by the Financial Conduct Authority. This helps to make sure the finance goes smoothly and gives you protection under the Consider Credit Act to return the car within 14 days if it’s not fit for purpose or you find a fault.

Exercise your haggling skills

You may not be confident haggling the cost of your first car but dealers will see buyers try to haggle their car price everyday so you shouldn’t feel like it’s a big deal. An easy way to haggle the price is to check out the market value of the car you want to buy at other neighbouring dealers. Use the market value as leverage for the dealer to beat or match the price. If they don’t budge, you could then buy a similar car from a local dealer for the lower price you’ve found. When you take the car out for a test drive, you can also check its condition without being under the watchful eye of the seller and use any scuffs or scratches to lower the price of the car.

Test drive the car

If you’ve just passed your driving test, the prospect of taking another car out for a spin can be daunting. However, you should never buy a car without test driving it first. Don’t be afraid to ask to take the car out for a good 30-minute journey. This way you can really get a feel for how you feel in the car, pick up on any little niggles and see how it drives on different terrains. This can be especially important if you’re buying a second-hand car as it also give you the opportunity to have as look over the car and check it’s in good condition.

Check your documents.

Before you commit to signing on the dotted line and buying your first car, it’s important all the paperwork and documents will be supplied.

• You will need the logbook (V5C) from the seller as this holds a record of who is the registered keeper of the car and is soon to be you. You should also check the logbook information matches the car you are buying, especially when using a private seller, if not, it could be a stolen vehicle.

• You should also ask to see the car’s service history and record of any work the car has done. Check that all the information is up to date and matches the car you are interested in buying. The service book can be a good indicator of whether the car has been looked after and that the mileage is accurate.

• You can check the MOT status of any car by using the DVLA website and entering the registration of the car you wish to buy. All cars require a valid MOT certificate once they are 3 years old to verify, they are roadworthy.

• If buying a car with finance, the dealer should run through all the need to knows with you before purchase. However, you should also carefully read your finance terms and conditions before you sign the document. Some agreements such as PCP finance have mileage and damage charges to pay if you return the car in another condition than what was agreed at the start of the deal.

• Once the deal has been done, you should always get proof of purchase from a private seller or a dealer in the case that something goes wrong with the car, and you need to verify your purchase.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.