How to buy your first car

Passing your driving test is a great achievement. Hereโ€™s how to build on that success by buying a safe, reliable car without breaking the bank

Words ByDavid Motton

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Nobody ever forgets their first car, so it pays to make it a good one. Whether you're a parent looking to choose a safe car for a newly qualified teenage driver, or youโ€™ve just passed your test and want to make your budget go as far as possible, What Car? can help.

On this page weโ€™ll give you our tips for finding a safe and affordable first car, and advice on how to keep running costs, such as insurance, under control. We'll also give your our recommendations for the best first cars to buy.

Should I buy new or used?

It goes without saying that a used car is going to be cheaper to buy than the same model new. After three years on the road, a second-hand car is typically worth 30-40% of the original price. So it's wise to let someone else take that financial hit and pick up a bargain.

The picture is more complicated than it first appears, though. A new car will come with a warranty to protect against unexpected bills, typically for three years, but sometimes for five or seven.

A dealer may sell a used car with a warranty, but itโ€™s likely to last for a few months or a year at the most. Do without a warranty and the cost of a breakdown could eat into the saving made through buying used, as well as meaning youโ€™re without your wheels until it can be fixed.

Unless you have enough funds to buy a car outright, thereโ€™s also the cost of finance to consider. This is when a new car, purchased on a competitive finance deal, can be less expensive than it first seems.

Can a new car make an affordable first buy?

Twenty years ago you needed a trust fund or generous parents to afford a brand new first car. Itโ€™s still not for everyone, but low-rate finance schemes with modest monthly payments have brought new cars within reach of more young drivers.

The most attractive deals for new drivers are usually PCPs (personal contract purchase leasing deals). These offer low monthly payments and leave a large chunk of the carโ€™s value until the end of the deal. Buyers can make the final payment to own the car, or hand it back with nothing more to pay. Alternatively, if the value of the car at the end of the term is greater than the final payment, this difference can be used as a deposit to start a new deal. However, the carโ€™s used value isnโ€™t guaranteed, and it can drop if you exceed the agreed mileage or donโ€™t keep the car in good condition.

The big appeal of a PCP is the low monthly payments. Special offers with low interest rates mean that if you are shopping for a city car, monthly bills of less than ยฃ100 arenโ€™t uncommon after a fairly large initial deposit.

What about insurance?

Itโ€™s not just the cost of financing a car that young drivers and their parents have to worry about; insurance can be crushingly expensive. Comparison website states that the average cheapest annual premium for a 17-year-old driver in 2015 was ยฃ2035. Thatโ€™s a 9% drop from 2014โ€™s ยฃ2232 average, but still a huge amount for someone still in education or on a low income to find โ€“ or a sizeable loan from the bank of mum and dad.

Any premium will be based on all sorts of variables, including the driverโ€™s age, driving experience, postcode and so on. Clearly, thereโ€™s not a lot a teenager can do about their age and number of years on the road, but they can do something about the car they drive.

Cars are given an insurance grouping from 1-50. Thatcham Research, the motor insurersโ€™ automotive research centre, decides which car fits into which group. Thatcham takes account of a carโ€™s performance, price, safety, security and the cost of repairing it to assign it to the right group. The lower the grouping, the lower the insurance premium should be, so go for a car with a low insurance group.

Other ways to reduce premiums include limited-mileage policies. However, itโ€™s important to be realistic when setting a mileage limit because there are likely to be extra fees if itโ€™s exceeded, and your cover could be invalid if you exceed it and donโ€™t tell the insurer.

Setting a high excess (the amount the driver has to contribute to repairs in the event of a claim) is another option, but be sure the amount isnโ€™t more than youโ€™ll be able to afford if you have to pay out.

Another means of chipping away at the annual premium is to insure a second, responsible driver (say, a parent or an older sibling). Just be sure itโ€™s someone who will actually drive the car, and donโ€™t be tempted to make a parent the main driver on a policy if the car is really their teenagerโ€™s. This is known as โ€˜frontingโ€™, and itโ€™s insurance fraud.

Telematics or black box insurance can also reduce a young driverโ€™s premium With a telematics insurance policy, the car is fitted with a black box to monitor when and how it is driven. Stick to the speed limit and drive smoothly and, after a while, the cost of cover will come down, but drive badly and your premium could rise. There are negatives, though, because some policies include night or mileage limits, and if you drive aggressively you could see your premiums rise beyond your initial quote.

How about all-in-one car and finance deals?

One way to get on top of buying a new car and insuring it in one go is to opt for a PCP scheme that also includes the cost of insurance in a single monthly payment.

Peugeot offers one called Just Add Fuel. Itโ€™s available to drivers as young as 18, as long as they have a telematics box fitted to monitor how the car is driven and report back to the insurer. As the name implies, Just Add Fuel not only covers the cost of insurance but also other routine bills such as servicing. This simplicity clearly appeals to young drivers: 27% of Just Add Fuel customers are aged 18-24.

Monthly payments will vary depending on a range of factors, such as the size of deposit and the driverโ€™s postcode, but based on a low-risk address and a ยฃ500 deposit, Peugeotโ€™s online finance calculator quoted us a monthly payment of ยฃ240 for an 18-year-old buying a Peugeot 1081.0 Active 3dr on a 37-month deal, with an annual mileage limit of 6667 miles.

Specialist young driver insurer, Marmalade, also offers a car-and-insurance bundle called Fuel & Go, although unlike Peugeotโ€™s scheme, servicing costs arenโ€™t covered.

Deposits start from ยฃ500 and monthly payments can be as low as ยฃ176. Over 12 months thatโ€™s ยฃ2112 โ€“ very close to the amount suggests many young drivers are paying for insurance alone.

As with the Peugeot scheme, Fuel & Go customers have a black box fitted to their car but arenโ€™t tied to one make. Cars from 14 manufacturers are available, with the Vauxhall Corsa and Fiat 500 currently the most popular models.

How do I choose a safe first car?

The newer the car, the more likely it is to have the latest safety kit. Any current or recent model should have anti-lock brakes and front and side airbags. Look for a car with electronic stability control, which helps to avoid an accident in the first place; itโ€™s been compulsory on new cars since 2014. Most new cars will have been assessed by the safety experts at Euro NCAP, so check its report before you buy.

Any car can be unsafe in the hands of an unsafe driver, however, so itโ€™s worth considering post-test training. The best-known scheme is Pass Plus, and thereโ€™s also IAM RoadSmartโ€™s Advanced Driver Course. Both are available nationwide, and can result in insurance discounts for drivers who successfully complete their courses.

How do I choose a reliable first car?

What Car?โ€™s reliability surveys are a good place to start. Also check out the Warranty Direct Reliability Index, which examines both how frequently car models go wrong and how much they cost to repair.

What Car? says

A used car is still the most likely first buy for a young driver, but all-in-one PCP leasing schemes now offer a far more affordable way to have a new car โ€“ and insure it.

So, what car should I buy?

We've done the hard work for you and come up with our shortlist of the best first cars to buy. The list includes city cars like the VW Up and Hyundai i10, but also more spacious options like the Skoda Fabia - a former What Car? Car of the Year.

Click here to see our full list of best first cars

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