What Costs Should I Consider When Buying a Car?
Buying a new car is always an exciting experience, especially if it's your first set of wheels. Getting the keys to your car means a sense of freedom, and, let's face it – we all love the air freshener thingy the dealer leaves hanging from the mirror. New car smells are the best! Excitement aside, you'll want to ensure that you pay a fair price for your new car, both when you buy it and its overall lifetime cost.
It's easy to let the excitement take over when looking for a new car, squeezing as much as you can out of your budget and not thinking about things like engine size. That's why you should know the actual cost involved with buying a car, so you're well prepared and won't be left disappointed a few months later.
We've put this guide together detailing the costs you should consider when buying a car so you can feel confident about your next purchase. Read on, and find out all there is to know about the real cost of buying a car.
Insurance is the first thing you should consider when buying a car. After all, it is a legal requirement, and you can't drive without having the correct cover. If this is your first car or you're under 25, then your insurance premiums will probably be higher, meaning you'll need to pay more.
The higher the car specs, the costlier the insurance. Therefore, your best bet is buying a car in a low insurance band. Insurance bands typically range from 1 to 50, with one being the lowest, so aim for one on the lower end of the scale.
Young drivers also have access to specifically-designed insurance policies, as well as black-box car insurance, which monitors the number of miles you cover when driving. Adding a second driver – such as a parent or older sibling – can also bring down your premiums.
Death and taxes are two certainties in life. Unfortunately, taxes follow you behind the wheel too, and you'll need to tax your car if you want to drive it without the risk of getting pulled over by the police and receiving a hefty fine.
Officially known as Vehicle Excise Duty (VED), car tax charges are based on several factors. These include things like the engine size, its C02 emissions and the car's registration date in the UK. Some vehicles don't require tax, such as electric cars.
Ahh, yes, petrol – the thing that no one thinks about when buying a car. It seems like such a minor insignificance, right? "When the car's empty, I'll just fill it up", you tell yourself as the dealer's hands over the keys to your absolute guzzler of a vehicle.
Within a month, you've spent almost £100, and it keeps asking for more. The amount you pay on fuel is one of the easier costs to overlook but also one of the most frequent. You'll definitely want to buy a cost-efficient vehicle when it comes to filling up the tank.
The larger the engine size, the more you will pay for fuel. For example, a car with a 1.1-litre engine will have much lower prices than a three-litre engine. You might have a need for speed and want to plump for the larger engine, but think of the long-term effect on your pocket – especially if it's your first car.
MOT stands for the Ministry of Transport test, and it's required once every 12 months. Cars have to pass an MOT by law before they're considered roadworthy, and the test usually costs around £55 – however, there may be more charges if the car shows any issues.
Dealerships can't sell a car if it hasn't passed its MOT, but if you're buying from a private seller, you should check its current status and when it requires a new one. You can't drive a car on the road if the MOT has expired.
Brand new cars don't need an MOT in their first three years, so if you're going to the dealership for a zero-mileage vehicle, then you're in luck. Nonetheless, you'll need to get a year MOT check if your vehicle is older than three years.
Hopefully, your car won't need many (if any) repairs, and the maintenance and service side of things doesn't mount up. However, a study from RAC found that the average first car costs drivers around £470 per year in maintenance costs.
The older the car, the more susceptible it is to repairs. Take it from our experience and a certain someone buying an older car on the cheap and subsequently paying close to £2,000 to fix a never-ending issue with the way it used fuel. The result? A ton of money spent, hassle incurred and getting rid of it for a new car just three months later.
It's impossible to tell if something will go wrong with your car, but spending a little bit more on a newer model can help you save a lot in the following months. Some dealerships also offer extended warranties, so you should check the cover on offer before buying.
Rules and regulations get rewritten and updated regarding new and older-model cars, and you should keep updated with the latest info. It could impact how much you pay for your car – or pay in the following months.
For example, councils in London are introducing surcharges on diesel cars, meaning you might have to pay just for living in specific areas. Of course, it's all being done for the greater good and the environment, but it's something to think about when you buy your next car, as the true cost may increase significantly.
Knowing a car's true worth
Having all the details to hand about the real cost of buying a car is super handy and will ensure you don't pay over the odds. Be thorough, check all the necessary details and workout not just how much it will cost to buy it; but also the everyday price. Once you're happy with the price, you can start getting excited about your next car.