Getting your first car on finance

Getting your first car on finance

Advice and Tips // 25 February 2016

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For many of us, the joy of passing our driving test is tainted only by the sudden expense of it all. Once you’ve paid the extortionate insurance premiums and road tax, you’re left with very little to spend when you go car shopping. If this is the case, car finance might be the option for you. 

Budgeting

This is probably the key point to consider when choosing your first car. How much can you reasonably afford to spend on each month? If you finance your car you are obliged to make monthly repayments and so it is important that these suit your monthly budget.

Sure, you can reason with yourself and spend a bit more if you don’t go out at all in the month, but that’s not realistic, so don’t rush this step. Think about how much you’ll be able to afford each month after you’ve paid your rent/mortgage, bills, and any other expenses you’ll have.

Which car to choose

While you might want the latest, up-to-date model that will make all your friends jealous – this might not be very realistic. Instead of aiming for the high-end models, look at what car will fall into a price bracket that you can reasonably afford.

Consider buying a used car. It can often save you money and it will maintain its market value a lot better than a brand new car. A car can depreciate by up to 11% of its original value the moment that it is driven off of the forecourt. Buying a 1-year-old car can save you up to 25% of the original price.

Moneybarn can help

So when it comes to buying your first car, we all know that price is going to be the most important factor – which is where buying a car on finance can help. Try out our Car Finance Calculator to see an estimate of how much you’d be paying each month with Moneybarn.