Budgeting for your first car

If you’ve just learned to drive, you might be desperate to hit the road in a car of your own. It’s easy to picture yourself behind the wheel of your dream car, but there are a lot of things to consider. Your budget is the most important. 

Running your first car can be very expensive, and it is essential that you understand what you can actually realistically afford. If you set yourself a budget, you can make sure you buy a car that suits your needs, including the running costs and insurance. 

To help make the choice of your first car a bit easier, learn how to budget for your new car and what other car ownership costs you need to take into account. 

SETTING A BUDGET FOR YOUR NEW CAR

With so many car leasing deals out there, it’s easy to fall into the temptation of leasing a car based solely on the monthly repayments but it’s important to work out how much the car will cost you to run. 

WHAT IS YOUR CURRENT INCOME AND EXPENSES?

Work out your current income and expenses. Base your income on what you take home after taxes, and include any other expenses or commitments that you have. 

HOW MUCH CAN YOU AFFORD?

How much can you afford to spend on a car? As well as the cost to buy or monthly lease costs, consider running costs, like fuel, insurance, servicing, or CARS Protection Plus

CONSIDERATIONS FOR FIRST CAR

When you have your budget in place, the next step is finding the right car. As well as the style and technology consider the running costs. 

RUNNING COST

Monthly rental is the first consideration for most people, but insurance, services, and fuels all add up too, so work out what your car will cost you over a year to help you budget. 

FUEL

Fuel is the main running cost for any car. Good fuel economy ought to be at the top of your wish list when you’re looking for your first car. 

To work out what your car is likely to cost you in fuel every year, you can use the manufacturer’s official MPG (miles per gallon) figure. MPG refers to the distance that you can travel in your car on a certain amount of fuel before it runs out. Most cars have three fuel consumption ratings; urban, extra-urban, and combined. 

Urban is city driving, extra-urban is country roads and motorways, and combined is the overall figure. Consider how you drive and where you drive most of the time, and make sure your new car has good fuel economy for where you will be doing most of your driving, whether that’s on the motorway or in city traffic. 

It is also worth you keeping in mind that that official MPG figure that is provided by the manufacturer is not always accurate to real-world representation and other others, such as the traffic, or driving in a spirited way, will also have an effect on your fuel consumption.


Photo Credit: Volvo

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