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Budgeting For a Car – The Costs

First Car Guide

Buying your first car is an exciting moment, you will suddenly have the ability to go wherever you want, whenever you want in your car. It does, however, cost quite a lot of money, especially for young, first time drivers. It’s most likely the biggest and most expensive purchase you will have made in your life! So before you go diving head first into buying a car and getting on the open road you need to think about what exactly you can afford to spend on buying your car and all the various running costs that come with it.

This post is going to cover all the things you need to consider as part of your budget for purchasing your first car. From insurance to tax, we will cover the details to help you lay out a realistic budget that you can stick to and make sure you can afford to keep your new pride and joy on the road and running smoothly.

Insurance

After the initial outlay of actually buying your car, insurance is going to be the biggest cost you, so it’s well worth spending time shopping around and saving what you can where you can. It’s not the most exciting thing to investigate but for the sake of a few hours of searching for quotes you could save £100’s!

When you are looking for insurance quotes there are many factors that affect the prices. Your car, your age, where you live, where you park your car overnight and even what your job title is! With so many factors affecting quotes you will get a huge range of prices. The cost can either be paid upfront as a lump sum or by monthly payments. Monthly payments might seem like the easiest option but they can add extra interest costs and it is often cheaper to pay upfront if you can.

Unfortunately, younger drivers (those most likely to be buying their first car) pay much higher insurance rates due to the fact that they are an unknown risk with no proven record of driving ability. There are a lot of reports about accidents involving young drivers, there’s plenty more info on this here and here. Due to this, we would advise allocating a similar amount of money for insurance as you have allowed yourself to spend on your car, it’s always better to over budget and find yourself with some spare cash than it is to have to fork out more than you expected to stay on the road legally!

Insurance

TIP: If you do a “Pass Plus” course with your instructor once you have passed your test, you may be able to find an insurer who will give you a discount because of this. Ask your instructor for more details.

Petrol or Diesel

Unfortunately you and your new car won’t be going anywhere soon if you don’t fill the tank up with fuel. Despite average fuel prices falling it’s still not cheap to fill up your car. Sites such as This is Money have a great fuel calculator where you can work out a good estimate of what your annual petrol or diesel costs might be, based on the current prices. This will help you to budget for what you might be paying on a monthly or yearly basis.

Car Tax

After you’ve bought your car and insured it, the next thing you’ll need to think about is car tax. Any vehicle that is registered in the UK needs to be taxed if it is being used or parked on public roads. Even if your vehicle is not being used and being kept off-road, it must be taxed or have a SORN (Statutory Off Road Notification). The amount of tax that you have to pay for your car will depend on how big your car’s engine is (if it was registered before 1st March 2001) or what type of fuel it uses and it’s CO2 emissions (if it was registered after 1st march 2001).

Car Tax

You can see a full list of costs for the different bands and engine sizes here.

As you can see, newer cars that are in the lowest bands are very cheap (or free!) to tax, so looking for a car that is in bands A-C can save you around £100 and if the car is registered after 1st April 2010 it’s free if it is in bands A-D. Obviously the newer the car the more expensive it will be to buy so it is swings and roundabouts in that respect

Servicing & MOTs

If you have bought your first car it is unlikely to be brand new, and any car over 3 years old needs to pass an MOT test on a yearly basis to demonstrate that it meets the minimum road safety and environmental standards. You can check the status of your new vehicle, or one that you are looking to buy, online. All you need to know is the registration number of the car and the MOT test number from the most recent certificate. Your car needs to be serviced either annually or after a certain mileage (the details of this should be provided in your vehicle’s manual). Before buying a car, be sure to check it has a full service history and there is nothing that looks like it is likely to need replacing and cost you a fortune in the near future.

You can view a full breakdown of the maximum prices that can be charged for an MOT test here so you can check you aren’t being ripped off. However, a lot of garages will offer a discount on this price. As always it’s worth shopping around or going on a personal recommendation, it’s better to go with a trusted mechanic so you know you aren’t going to get stung for extra costs that aren’t really necessary.

Breakdown Cover

The thrilling world of breakdown cover can be as daunting as the equally thrilling world of insurance to navigate. With so many different offers and companies to choose form it’s easy to feel swamped with different offers. It’s not an essential thing to have for drivers but if you do plan on going further afield than your local town or city then it’s worth looking at.

Breakdown

There are two types of breakdown cover – personal and vehicle. Just as it sounds, vehicle will cover your vehicle should it break down and personal will cover you in any vehicle that you are driving. For first time drivers it’s best to look at vehicle cover, unless you plan on clocking up some miles in your mates or dads car!

There are various levels of cover at a range of different prices, starting from under £20 a month and going up to well over twice that. Some covers will simply assist you at the road side; some more expensive covers will help you with home start issues and European assistance. If your budget is say £20 a month then you aren’t going to get the most comprehensive cover but it could still save you on expensive call out costs if you’re new pride and joy gives up the ghost in the middle of nowhere. We’ll be looking at breakdown cover in more detail in a later blog so keep an eye out for that if you want to know more!

Running Costs

On top of all this you will need to make sure you can afford to pay for any running repairs or minor problems. They can be anything from a new brake light that’ll cost you a few quid to a new water pump that will cost you a few hundred quid (I’ve been there, it’s not cool, literally!) It’s worth adding a bit of money to your monthly car budget to put on one side just in case. Even if what you have doesn’t cover any major problem you might have, it’s going to soften the blow when you do get the bill.

 

So there you have it, Click On Tyres breakdown of what you need to budget for when you take the plunge and buy your first car. It’s a pretty daunting prospect to think about how much money it’s going to cost. But, if you’re smart, shop around and don’t rush into any decisions then there is money to be saved and bargains to be had. Happy shopping!

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