Buying your first car is an important moment in anyone’s life – not only are you gaining a sense of independence and freedom, but you’re investing in an asset integral to a large part of your life.
But being a motorist can be expensive, which is why it’s essential to think about the potential costs of being on the road before buying your first car. While buying the vehicle itself may be the most expensive outgoing, there are plenty of other costs to consider when buying your first car.
Here is a list of five costs to consider when buying your first car:
As a legal necessity, insurance is the first, and one of the most costly expenses 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 will likely be expensive. With that said, there are things you can do to keep insurance costs low.
Possibly the most obvious yet important way to save money on insurance is by purchasing a car which is assigned to a low insurance band. An insurance band ranges from one to 50 (one being the lowest) – so the lower the insurance band, the cheaper your insurance will be.
There are also specially designed insurance policies for young drivers available which you can look into, as well as black box car insurance schemes which monitor the amount of miles you drive. With that said, if you exceed your mileage limit, you may have to pay additional premiums, so as long as you stay within your mileage allowance, you’ll have no problem.
You could also choose to add a second driver to your insurance policy. Whether this be a parent, sibling, or friend, as long as the second driver is aged over 25 and has a good, if not clean driving record, this will help to bring down the price of the insurance policy.
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 will be at an additional cost.
If your MOT runs out, you can no longer drive your car on the road. If you do, you can be fined up to £1,000. To ensure you don’t forget, it can be a good idea to set a reminder one month before your MOT renewal is due – not only will this help you avoid forgetting to renew, it will also give you time to save money.
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 difficult to know exactly how much you’ll need to pay.
Put simply, the amount of car tax you'll pay is based on a number of factors including engine size, CO2 emissions and the date the car was first registered in the UK - this is not the same date you bought the car if you bought it used.
It refers to the date the vehicle was registered to its first keeper in the UK. For example, if a car was bought brand new and registered on 7 April 2013, then sold to someone else on 12 August 2016, it will always have a first registration date of 7 April 2013.
According to the RAC, it costs around £472 to maintain a used car over the course of one year. This includes the MOT service and any repairs or servicing required. When you first purchase your car, certain repairs may be covered on your warranty and may even include a one-off MOT and service. This is of course, entirely dependent on whether you have a warranty and if so, the type and duration of it.
When buying a new or used car from a registered dealer, you’ll always be offered some kind of warranty. A warranty of three months is usually the standard, but some dealerships only offer 30-days which is why it can be beneficial to pay extra to extend your warranty.
With that said, it is vital to read the warranty handbook or document thoroughly because a warranty does not cover everything, and you may find yourself paying out on repairs you thought were covered.
No matter whether you buy petrol or diesel, fuelling your car is another essential cost to think about. The amount of money you pay to fill up the tank each time depends on how fuel efficient your car is.
To measure this, you should look at things like the size of the tank, engine size, and how many miles per gallon (mpg) your car can do. Remember, the bigger the engine, the more fuel it will use in general. As well as thinking about engine size, there are other ways you can reduce fuel consumption and keep fuel costs low.
One of them is by adopting some careful driving techniques which include driving in higher gears, turning off air conditioning, accelerating gently, and braking less by anticipating other road users’ movements.
For instance, in heavy traffic it can be wise to keep a good distance between yourself and the car in front and slowly closing the gap rather than driving directly behind them - this should reduce the amount of times you’ll have to brake.
The heavier the car, the more fuel it will use which is why you should avoid leaving heavy items in it and remove roof racks if you aren’t using them.
Choosing where you fuel up can also save you some money. Supermarkets often have competitive prices compared to major oil and gas companies, plus you have the added benefit of saving up reward points when opting for a supermarket.
Making sure your tyre pressure is well maintained can also help reduce fuel consumption. In fact, the RAC claims correctly inflated tyres can improve fuel consumption by up to 2%.
Finally, don’t drive with the fuel light on. Even though we may have all been guilty of doing this from time to time, driving with low fuel can cause damage to your car. This is because fuel acts like a coolant for the fuel-pump motor, so when your tank it running low, this allows the pump to suck in air, which creates heat and can cause the fuel pump to wear and potentially fail.
If you run out of fuel you can do serious damage to your catalytic converter which may then need to be repaired or replaced. By putting off filling up, you’ll only end up spending more to cover the costs of any maintenance needed for the damages caused.
While depreciation may not be something you’ve initially thought about before buying your first car, it is important. To get the most value from your car, it’s best to opt for a used car rather than one that’s brand new.
This is because new cars lose their value much more quickly than used cars do, and this can be particularly true in the hands of a new driver who may be more likely to add minor, or even major damage to the vehicle. It’s likely that insurance will cost more with a new model too, whereas there are often more affordable ways to insure young drivers if they are driving older, less valuable cars.
The task of buying and maintaining a car on a budget can be made simple as long as you keep in mind all the additional costs that come with owning a car. Getting clued up about the potential prices of things like insurance, MOT and fuel costs can really help you make that final decision, and once you do, you’re sure to reap all the benefits of becoming a car owner.