Money for Life work in partnership with the Money Advice Service, an independent organisation set up by government. Money AdviceService provides free, unbiased money guidance across the UK to help people make the most of their money. If you have a question or need help, you can chat to them here.
By Tyrone Huggins
Buying your first car is an exciting time – not only are you gaining a sense of independence and freedom, but you’re investing in a massive part of your life. Being a motorist, however, is a big commitment and the price you pay upfront is just the tip of the iceberg. If you’re on a tight budget, there are many essential factors you will need to think about. So before you begin to shop around, here are some costs you might want to look into so you’re not caught by surprise and left out of pocket.
Insurance is the first most costly expense to bear in mind when buying your first car. You may know this already, but ensuring your car as a young driver and first-time car buyer can cause it to go up. What you might not know, however, is there are things you can do to minimise these costs.
Getting a cheap second-hand car for one can help you save money on insurance. This is because the lower the value of your vehicle, the lower the insurance band your car will fall under.
Getting black box insurance may also help to lower costs. A black box measures various aspects of how, when and where you drive – and the data collected can be used to calculate a personalised quote at a cheaper rate.
Lastly adding a second named driver to your insurance policy, such as a parent sibling or friend above 25 can help to bring down your price as long as they have a clean driving record.
Car tax, officially known as Vehicle Excise Duty (VED), is another cost you’ll have to keep in mind, and with recent changes made to this legal requirement, it can be challenging to know exactly how much you’ll need to pay. Put simply, the amount of car tax you’ll pay is based on several factors including CO2 emissions, engine size and the date the car was first registered. With this in mind, it’s a smart choice to go for a car that is more eco-friendly for the environment. Smaller engine size, for instance, can be a big money saver, but an even better saving could be to buy a hybrid or electric car, as may not pay any VED at all! Not only does this mean you’ll benefit from greater tax reliefs, but you’ll have peace of mind that you’re helping to save the planet.
When buying your first car, you’ll need to ensure your car has an up-to-date MOT and is appropriately taxed. An MOT is a mandatory annual test for all cars over three years old. By law, the car must pass the MOT to ensure it’s safe and roadworthy. The MOT test itself can cost up to £54.85, but any repairs required to pass can quickly add up, especially if your vehicle is on the older side.
Did you know, 20% of MOT failures are caused by lighting and signalling problems? These are minor repairs that could stop you from paying MOT twice so always ensure you give your car a thorough check at your local garage beforehand to minimise costs.
According to the RAC, it costs around £472 on average to maintain a used car over the course of one year. This, however, will vary based on factors such as the brand and model – generally, if you go for a luxury brand car with more features, the parts costs more to replace and can put a huge strain on your pocket long term. But no matter what car you buy, the best advice for cutting costs in this area is to drive with care. You can extend the life of your clutch, brakes, tyres and more by simply making this small adjustment! Which leads us into our final hidden cost…
While it’s obvious cars can’t run on hopes and dreams, many first time buyers don’t anticipate the actual monthly cost of fuel. You can usually work an approximate estimate of this cost from a cars tank size, engine size and monthly usage. For instance, if you know you will use your car to travel to work five times a week, calculate the journeys total miles and divide it by the cars miles per gallon to get the amount of fuel you’ll need. Then multiply this by whatever the cost of fuel per gallon.
Aside from engine size, another way you can get more out of your fuel is by practising eco-driving. By adopting some careful driving techniques such as driving in higher gears, turning off air conditioning, accelerating gently, and braking less by anticipating other road users’ movements – you can reduce the cost of fuel by 10-30%.
As with any large purchase, cars come at a cost – but follow these tips before buying, and your pockets will thank you in the long run!
Money for Life work in partnership with the Money Advice Service, an independent organisation set up by government. Money AdviceService provides free, unbiased money guidance across the UK to help people make the most of their money. If you have a question or need help, you can chat to them here.
