Buying your first car: everything you need to know

First off, congratulations if you’ve just passed your driving test! This is a really exciting time where the world opens up to you and you’ve got the freedom to go anywhere – not just where a bus will drop you off.

But it’s also a time of realisation. You might think you’re the best driver in the world, having aced reversing around a corner in your test, but most insurance companies don’t want to touch you with a bargepole. New drivers are high risk for insurers, so getting quotes is likely to take some of the shine off your recent achievement. You might find you’re quite limited in what’s affordable to insure.

Buying your first car – the checklist

• Make a shortlist of the cars you want to consider
• Get insurance quotes for every car on your shortlist
• …rewrite your shortlist because your first choices were too expensive to insure
• Of the cars you can insure, work out which is the best for you
• Go to see cars you like in person, make sure it’s in a suitable condition and take them out for a test drive
• Buy a car and enjoy the freedom!

How to buy your first car

Unless you’re very lucky, your budget is likely to be the main concern, and that’s what’ll influence your decision primarily.

Cost of the car, insurance and tax

Let’s say you’ve saved up money earned from your Saturday job and you’ve got £5,000 to spend on a first car. That’ll need to cover the cost of the car and insurance, and possibly a year’s road tax as well. Insurance is going to take a big chunk out of your available funds – depending on the car you pick and where you live, the cost of insurance is likely to be over £1,500 and may well be significantly more.

Cars registered between 1 March 2001 and 31 March 2017 are taxed based on their emissions, with many small cars falling into a tax band that only costs £20-40 a year – and some costing nothing to tax! However, you can pay your car tax in monthly instalments, which may not make finding a cheap-to-tax car a top priority.

Cash or finance?

If you’re able to afford a fixed monthly payment, you may want to consider financing your first car. You could use a portion of your £5,000 savings as a deposit towards a car, and then pay a set number of monthly payments.

This would enable you to drive a more modern car that’s likely to be safer and more reliable than one you can pay for with cash alone. But you need to take into account that buying a car on finance is a long-term commitment, and whether changes in your circumstances are going to affect whether you’ll be able to keep up with the payments – if you’re planning to head off to university, for example.

It’s also worth bearing in mind that, if you have a limited credit history, you may find it hard to be approved for finance.

Choosing make and model, body style and fuel type

If keeping insurance down is a priority, you’ll probably end up with a small petrol hatchback – something like a Volkswagen Polo or Vauxhall Corsa. However, while these cars may offer the cheapest insurance groups on paper, insurers also look at how many 18-24 year olds are driving a certain car, and premiums may be high if you choose a common first car. It’s worth thinking out of the box a little if you don’t mind driving something usually considered an ‘old person’s car’ – it might get you cheaper insurance.

If you’re open to a wider choice of cars, consider what type of driving you’ll be doing. Diesel cars offer great fuel economy but need semi-regular long drives. Hybrid cars are very efficient around town but less so on the motorway. If you’re into electric cars, the cheapest EVs start from just a couple of thousand pounds to buy – but these may have a battery lease with ongoing monthly payments, or a depleted battery with a short range. EVs offer bargain running costs if you can charge at home, which helps to offset the slightly higher insurance cost. For many first-time buyers, a petrol car will probably provide the best all-round balance of usability and cost.

Tips for buying your first car

• Don’t overstretch yourself and put yourself into debt further down the line
• Always check insurance costs before deciding to buy a car
• Be confident in walking away if you look at a car and it’s not right for you
• Remember to factor in the cost of insurance and tax, not just the price of the car
• Service history is more important than mileage on older cars

What to look for when buying a first car

Regardless of whether you’re buying your first car or not, you should always give a used car a thorough check over. Make sure to check:

• Tyres – check the tyre pressure, tread and condition of all four tyres
• Leaks – there might be a little bit of water from the air conditioning, but avoid cars obviously leaking oil, coolant or fuel
• Rust – surface rust is fine on underbody components, but you don’t want any structural rust or bodywork rust
• Damp – check the boot carpet and floor areas for any sign of water damage
• Electrics – check all the car’s features, such as the lights, radio, mirror adjustment and parking sensors, if fitted
• Air conditioning – if fitted, check if the A/C blows cold
• Warning lights – make sure no warning lights stay on once the engine is started
• Common problems – every car will have common issues, so research these beforehand and ask to see paperwork for work having been done. For example, if the car needs a timing belt chain every X thousand miles, work out if it should have been done already
• Service history – the more paperwork and servicing details, the better. A big pile of service receipts shows the car has been looked after

Where to buy a first car

We’d recommend buying a car from a reputable car garage – whether that’s a small local one or a larger national chain of stores. You get much more protection buying from a dealer than from buying from a private buyer, as well as incentives like a free warranty. Browse our selection of cars under £10,000 to find the car for you – all with low mileage and warranty cover included.

It’s always best to book a test drive and not simply turn up, and remember to bring your driving licence with you. We’d recommend bringing a friend or family member for a second opinion, too. Once you’re happy with the car and have decided to buy it, you’ll need to do some paperwork. The salesperson will guide you through this, and show you how to tax the car before you drive it away. Some stores offer same-day driveaway, or you may need to pay a deposit – part of the car’s value – and then pay the balance when you go back to collect the car.

We’ve got first-time drivers covered:

• Top tips for passing your practical driving test
• Top tips for passing your theory driving test
• Should you learn to drive a manual or automatic?
• The most common driving test failures
• The most common mistakes new drivers make
• The most useful skills for new drivers to develop