Before You Buy

Your total car budget should include the purchase price plus ongoing costs. For the purchase, save at least 10% of the car price for initial expenses (insurance, tax, immediate servicing). Monthly running costs typically include: insurance (£50-£150), fuel (£100-£200), tax (£10-£50), and maintenance (£50-£100). As a rule, total car expenses should not exceed 15-20% of your monthly income.

Used cars offer better value for most buyers. New cars lose 40-50% of their value in the first 3 years, while 2-3 year old cars have already absorbed this depreciation. However, new cars come with full manufacturer warranties, no history concerns, and latest safety features. Choose new if you want warranty peace of mind and can afford the depreciation. Choose used if budget is a priority and you can verify the car's history.

March and September (new registration plate months) offer the best deals as dealers discount older stock to make room for new registrations. December and January are also good as dealers clear inventory to meet year-end targets. For any time of year, negotiate towards month-end (28th-31st) when salespeople need to hit quotas. Avoid buying immediately after new plate releases when demand is highest.

Dealers offer more protection under the Consumer Rights Act 2015, provide warranties, handle paperwork, and allow part-exchange. However, they cost 10-20% more than private sales. Private sellers are cheaper but offer no warranty and limited legal recourse. Choose dealers if you want protection and convenience. Choose private sellers if you have mechanical knowledge, can verify history yourself, and want the lowest price.

Depreciation is how much value a car loses over time. New cars depreciate fastest: 15-35% in year 1, then 15-25% annually for years 2-3. After 3 years, depreciation slows to 10-15% per year. This means a £30,000 new car is worth £15,000-18,000 after 3 years. To minimize depreciation impact: buy 2-3 year old cars, choose reliable brands (Toyota, Honda, Mazda), avoid unusual colors, and maintain full service history.

Start by listing your needs: passenger capacity, boot space, fuel type, annual mileage, and budget. Research reliability ratings on Honest John, Which? Car, and owner forums. Check insurance groups (1-50, lower is cheaper) using comparison sites. Review MOT history data to see common failure points. Test drive at least 3 different models. Factor in running costs: diesel for high mileage (12,000+ miles/year), petrol for low mileage, hybrid for mixed driving.

Beyond the purchase price, budget for: HPI check (£20-40), pre-purchase inspection (£100-200), first MOT if due soon (£55 test + potential repairs £200-800), immediate servicing if history unclear (£150-500), road tax (£20-600/year depending on emissions), insurance (get quotes before buying), and potential repairs in first 6 months (budget £500-1,000 for cars over 5 years old). Private sales also need immediate insurance before driving away.

Check prices for identical cars (same model, year, mileage, condition) on AutoTrader, Motors.co.uk, and eBay Motors sold listings. Use valuation tools like Parkers, CAP, and Glass's Guide. Dealer prices are typically 10-20% above private sale prices. Adjust for: full dealer service history (+10-15%), recent MOT (+£200-400), new tyres (+£400-600), low mileage for age (+5-10%), or deduct for: missing service history (-15-30%), faults found in inspection, upcoming major service, advisories on recent MOT.