First-Time Car Buyer Guide
Everything you need to know when buying your first car. From setting a budget and choosing the right vehicle to insurance, financing, and ongoing costs. Make your first purchase with confidence.
Step 1: Set Your Budget
Your budget includes more than just the purchase price. Calculate the total cost of ownership including insurance, fuel, tax, servicing, and repairs. Many first-time buyers overspend on the car itself and struggle with running costs.
Purchase price
Save at least 10% deposit if financing. Budget £2,000-5,000 for reliable first car. Cheaper cars often need more repairs. Avoid stretching budget to absolute maximum as unexpected costs will arise.
Insurance costs
Often £1,000-2,000 annually for new drivers. Get quotes before buying specific models. Insurance group affects premium (1 lowest, 50 highest). Small, low-powered cars cheapest to insure. Black box policies reduce costs.
Road tax
Check annual VED cost on GOV.UK. Ranges from £0 (older low emission cars) to £600+ (expensive or high emission vehicles). Factor into monthly budget.
Fuel costs
Calculate based on expected annual mileage. Assume 40mpg for petrol, 50mpg for diesel. Budget £100-200 monthly for typical commuting. Fuel-efficient cars save significantly over time.
Servicing and repairs
Annual service £150-250. Budget £500-1,000 yearly for repairs and maintenance on used cars. Older or higher mileage vehicles need more. Emergency fund essential for unexpected failures.
Step 2: Choose the Right Car
Best first cars
Focus on reliability, low insurance, affordable parts. Popular choices: Ford Fiesta, Vauxhall Corsa, Toyota Yaris, Honda Jazz, Volkswagen Polo. Avoid premium brands (BMW, Mercedes) as first car due to expensive repairs.
Engine size considerations
1.0-1.4L petrol ideal for first-time buyers. Adequate performance, low insurance, good fuel economy. Avoid turbocharged engines initially as more complex. Diesels only worthwhile for high mileage (over 15,000 miles yearly).
Age and mileage sweet spot
Best value: 3-7 years old with 30,000-70,000 miles. Avoid very cheap old cars needing constant repairs. Also avoid very low mileage (suggests short journeys or sitting unused). Consistent annual mileage ideal.
Body style
Superminis and small hatchbacks best for beginners. Easy to park, maneuver, and insure. Avoid large SUVs or powerful cars initially. Estate or larger car only if genuinely needed for family or work.
Step 3: Financing Options
Cash purchase
Simplest option with no interest charges. Own car outright immediately. No monthly payments. Best choice if you have savings. Avoid depleting entire emergency fund for car purchase.
Personal loan
Borrow from bank or building society. Interest rates 6-15% typical. Own car outright immediately. Can negotiate better price paying cash to seller. Compare APR rates carefully across lenders.
Hire Purchase (HP)
Finance through dealer. Deposit plus monthly payments. Don't own car until final payment. Can't sell without settling finance. Interest rates 8-15%. Easier approval than personal loan for some buyers.
Personal Contract Purchase (PCP)
Lower monthly payments than HP. Large final balloon payment to keep car. Can return car instead. Never own car during contract. Complex and expensive overall. Generally avoid for first car unless leasing mindset.
What to avoid
High interest dealer finance without shopping around. Loans with early repayment penalties. Finance on cars worth less than loan amount. Monthly payments exceeding 15% of take-home pay.
Step 4: Where to Buy
Franchised dealers
Brand-specific dealers (Ford, Toyota, etc.). Higher prices but better warranty protection. Approved used programs offer peace of mind. Finance readily available. Professional inspection performed. Good for nervous first-time buyers.
Independent dealers
Better prices than franchised dealers. Quality varies significantly. Check reviews carefully. Less warranty protection. Some excellent, others problematic. Inspect vehicle thoroughly and get independent check.
Private sellers
Cheapest option but no warranty protection. Meet at seller's home address. Check V5C matches seller. Scams more common. Recommended only with knowledgeable friend or mechanic. Save 10-20% compared to dealers.
Auctions
Can find bargains but risky for beginners. Limited inspection time. Easy to overpay in bidding excitement. No warranty or comeback. Best avoided for first car unless very experienced helper available.
Step 5: Essential Checks
MOT history check
Use MOTCompare to review full test history. Look for patterns, mileage consistency, and recurring advisories. Red flag if advisories ignored year after year. Clean MOT history adds significant value.
HPI or vehicle history check
Reveals outstanding finance, stolen status, or write-off history. Essential before purchase. Costs around £20. Never skip this check. Could save you thousands and legal problems.
Service history
Stamped service book or receipts proving maintenance. Full history adds 10-20% to value. Missing history suggests neglect. Critical for timing belt verification on older cars.
Pre-purchase inspection
Independent mechanic inspection worth £100-150. Identifies hidden problems before you commit. Provides negotiation leverage. Can save thousands by avoiding problematic vehicles. Highly recommended for first purchase.
Step 6: Insurance Essentials
Types of cover
Third Party: Covers damage to others only. Cheapest but limited. Third Party Fire and Theft: Adds your car if stolen or burned. Comprehensive: Covers everything including your car damage. Often similar price to TPFT.
Reducing premiums
Choose low insurance group car (1-10). Add experienced named driver. Increase voluntary excess (but keep affordable). Park in secure location overnight. Build no-claims bonus. Consider black box (telematics) insurance.
Comparison sites
Use multiple comparison sites for best quotes. Try Compare the Market, GoCompare, Confused.com, MoneySuperMarket. Also check insurer direct websites. Quotes vary significantly. Renew annually, don't auto-renew.
Policy details
Read terms carefully. Check mileage limits match usage. Understand excess amounts (compulsory plus voluntary). Note restrictions on modifications. Declare all drivers accurately to avoid invalidating policy.
Step 7: Completing the Purchase
Documentation needed
V5C logbook in seller's name. Valid MOT certificate. Service history. Any warranty documents. Two keys ideally. Locking wheel nut key. Owner's manual helpful but not essential.
Payment safety
Bank transfer safest for large amounts. Never pay cash for cars over £1,000. Get receipt with seller details, amount, date, and vehicle registration. Keep all paperwork safely.
V5C transfer
Seller completes their section, you complete yours. Both send to DVLA. Seller gives you green slip (V5C/2) as temporary proof. New V5C arrives in 2-4 weeks. Can tax and insure immediately with V5C/2.
Immediate tasks
Tax vehicle online immediately (cannot drive without tax). Arrange insurance before collection. Check all lights, fluids, and tyre pressures. Familiarize yourself with controls before driving away.
First-Time Buyer Mistakes to Avoid
- Buying car at absolute maximum budget with no emergency fund
- Choosing car based only on looks, ignoring running costs
- Skipping pre-purchase inspection to save £100
- Not checking insurance costs before committing to purchase
- Believing "one lady owner, never driven hard" seller stories
- Accepting dealer finance without comparing other lenders
- Buying first car viewed without shopping around
- Ignoring red flags because you've fallen in love with car
Ongoing Costs Checklist
Budget for these regular expenses:
Monthly costs
Fuel (£100-200). Insurance if paying monthly (£80-150). Finance payment if applicable (£150-300). Parking or congestion charges if relevant.
Annual costs
Road tax (£0-600). MOT test (£55). Service (£150-250). Insurance (£1,000-2,000 first year). Breakdown cover optional (£50-150).
Occasional costs
Tyres (£200-400 per set). Brake pads (£150-300). Battery (£60-150). Unexpected repairs (budget £500-1,000 annually). Timing belt if due (£400-800).
Start Your Search
Check MOT history and vehicle details before viewing any car. Knowledge is power when negotiating.
Check Vehicle History