Unfortunately, buying a new car isn’t as simple as getting a pair of jeans or a new mobile phone. The cost of getting the car is only the start of it. After getting the car, you’re going to have to deal with vehicle registration, getting insured, road tax and other ongoing costs.
This guide takes you through what you need to know when buying a car, before walking you through getting on the road legally and efficiently.
How to buy a car
So you know you want your first car, but now you’ve got a big decision to make. Do you go out and buy a new car or opt for a used one?
The obvious reason you might go for a second-hand vehicle is they’re far cheaper. There’s no two ways about it. However, new cars are protected by law and come with a warranty should it play up. In addition, you don’t have to pay a lump sum of tens of thousands to get a new car these days.
What to know about car loans
Getting a brand new car used to be out of the question for first-time buyers; however, these days you can take out a car loan or finance your new vehicle.
Before going down this route though, ask yourself if you can afford to repay the loan or pay the monthly instalments. You’ll need to sit down and draw up a long-term budget to work this out. What’s more, it’s vital you look at all the terms and not just the rates when looking at a potential deal. If you want to go down this route, there are a few different types of car loan on offer.
Personal loan. You can go to a bank or another high-street lender and take out an unsecured loan to help you buy a new or used car. This option is ideal if you’re looking to own your car in the long run and you need to borrow. However, you will have to pay back the total amount you borrowed plus interest.
Hire Purchase. Put down a deposit and then you typically pay off the rest of the car’s value over a period of a year to five years. At the end of the agreement, you can pay a fee to own the vehicle. You might get an HP loan if you need a car but can’t pay all the money upfront and you’re struggling to get a personal loan.
Personal contract purchase deals. A PCP is ideal for anyone who wants a change of car in a few years’ time. You put a deposit down at the beginning, then during the deal you pay off however much the finance company predicts the car will lose value during the time you own it. You also have to pay interest as well. If you want to keep the car at the end of the contract, you will need to pay a balloon payment.
You might ultimately decide that a new car is far too expensive and a used model will be better value for money. If you buy from a second-hand dealer, you can get some protection should your car have any issues in your first few months of having it.
You might also get a used vehicle from a private dealer – a path that comes with potential pitfalls. Should your new wagon have any problems or it doesn’t live up to the seller’s description, then you don’t have much power to complain or get a refund.
Here’s a checklist of what you should look for when buying from a private seller.
Ask for paperwork. Make sure they can provide documentation and the car is registered in their name. If you see blatant mistakes, like the wrong vehicle colour or it doesn’t have an up-to-date MOT, then steer well clear.
Take a test drive. This is vital and the best way to see if there are underlying problems with the car’s performance. Make sure the engine is cold when you start because a warm engine might hide any issues. If the seller refuses a test drive, then walk away from the deal – it’s not worth the risk!
Look over the car thoroughly. See if the paint job is even, whether there’s rust under the bonnet, under the foot wells or under the car.
Check the seat belts. Make sure the car has seat belts and they’re in working order.
Washers and wipers. Test the washer and wipers as you don’t want to have to pay to fix these a few weeks down the line.
Working lights. Get a friend to come with you so they can check this, or ask the owner to turn the lights on while you inspect.
Locks and windows. Make sure your car’s locks and windows are functioning. You don’t want to have your new car stolen!
Tyre tread. Confirm the tyres have sufficient tread. You don’t want to pay for new ones just after getting the car.
Once you know the make and model of your first car, it’s vital you get insurance sorted as you can’t take to the road without. Yet, getting insurance for the first time can seem a bit daunting and expensive, particularly if you’re new to driving as insurers hit young and inexperienced drivers with the highest costs.
So you’ll need to really shop around and compare, and decide which of the following three types of insurance coverage is the one for you.
Third party. This is the minimum level of coverage you need to legally take to the roads and will protect a third party (someone else) if you damage them, their car or their property.
Third party, fire and theft. This is the middle level of coverage, offering the same protection as above. However, it also protects your car should it get damaged as a result of a fire or someone stealing it.
Comprehensive. This offers the same benefits as third party, fire and theft. However, it also covers you and your vehicle should you have an accident, even if it was your fault.
After you get one of the basic insurance policies, you can legally take to the roads. There are a few additional insurance options you might decide are essential.
Breakdown cover. Should your vehicle have issues, breakdown cover could save you hassle and money by having someone fix your vehicle or tow it to the nearest garage. You might even get a lift home.
Legal cover. Should you have an accident and your insurer won’t cover court costs, legal cover will help you go after someone or defend yourself in front of a judge.
Courtesy cars. Had an accident or your car is off the road for a while? This will give you a temporary vehicle while yours is getting fixed.
How much should I budget for upfront car costs?
Car insurance. This will be expensive for new drivers, so expect to pay upwards of £500 for your deal.
Road tax. Unless you buy a car that is in Vehicle Excise Duty (VED) band A, an electric vehicle or a model made before 1973, you will have to pay road tax.
What about ongoing car costs?
MOT test. Once a car is older than three years, you’ll have to take it for an MOT test every year to make sure it’s roadworthy and potentially do repairs if it isn’t.
Parking. You might have to pay for a permit outside your home, on certain streets and in Pay & Display car parks.
Loan costs. If you’ve taken a loan out on buying your car, expect to pay interest and other fees.
Tyres. After a while, your tyres will have insufficient tread and will need to be replaced. Failing to do so is not only unsafe but could also lead to you getting a fine and points on your license.
Fuel. It goes without saying your car will need some sort of fuel, whether it’s a petrol, diesel or electric car.
Frequently asked questions
If you’ve bought a new car, the dealer will usually register it for you. Should they do this, you’ll be sent a V5C registration certificate (log book) within six weeks. Get in touch with DVLA if you do not get one.
How you register a used car depends on whether it has a V5C log book. If it does, the seller can register the vehicle to you by email or post.
Should it not have a V5C log book, the DVLA actually advises you to not buy the car in the first place. If you do, then you’ll need to register the vehicle in your name by using form V62 “Application for a vehicle registration certificate”. However, you’ll have to pay a fee.
The offers compared on this page are chosen from a range of products we can track; we don't cover every product on the market...yet. Unless we've indicated otherwise, products are shown in no particular order or ranking. The terms "best", "top", "cheap" (and variations), aren't product ratings, although we always explain what's great about a product when we highlight it; this is subject to our terms of use. When making a big financial decision, it's wise to consider getting independent financial advice, and always consider your own financial circumstances when comparing products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
*Based on data provided by Consumer Intelligence Ltd, www.consumerintelligence.com (July ’24). 51% of car insurance customers could save £523.17
Esther Wolffowitz was a publisher at finder.com specialising in insurance. Esther holds an MSc in Media and Communication Governance from the London School of Economics and Political Science (LSE). See full bio
Find out the average cost of car insurance for a 17-year-old, the cheapest cars to insure and how to cut down your insurance premium as a young driver.
We’ve compared and rated the best car insurance for young drivers on a number of specific policy features and benefits that are relevant to younger drivers.
read our guide to getting the cheapest car insurance deal possible as a younger driver. Plus compare car insurance quotes from some of the cheapest companies.
Car insurance can be expensive if you’re under 25. Find out how to lower the costs and compare car insurance policies online to find one that works for you
Compare learner car insurance options for yourself, your son or daughter to ensure you have the right cover in place.
How likely would you be to recommend Finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser Disclosure
Finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which Finder receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. Finder compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
