Buying a car is one of the biggest purchases you’ll make. However, once you have bought your car, you have to keep it on the road. It’s important to think about how much this is going to cost in the long run.
Your budget will determine whether you can buy new or used and how much you can afford in running costs.
It’s crucial you’re realistic about your budget. Over-extending yourself can lead to problems later on – particularly if you have little or no savings and your income drops unexpectedly.
Use this simple Budget planner to work out how much you can afford to spend buying a car. It takes just a few minutes.
Once you’ve worked out how much you can afford to spend buying your car, make sure you can also afford to run it.
It’s worth bearing in mind UK motorists spend an average of £1,726.40 a year on running costs. (Source: Office for National Statistics, 2018) However, this figure does not include the cost of depreciation, which is the amount of resale value a car loses each year.
Depreciation affects new cars more than older cars, so the older the car, the smaller the drop in its value. That means if you know you’re likely to sell the car soon, an older car will let you get back more of the money you bought it for when you sell it.
Unless you already have a car in mind, you should start by looking:
You could also ask friends, family and work colleagues for recommendations.
Now you’ve made sure you can afford a car, it’s time to find out what you can buy within your budget.
But first, ask yourself the following questions, all of which are essential when choosing your next car: