Buying a new car can be both exciting and nerve wracking in equal measure. With so much choice and so many offers available, it can be hard to work out what to do first.
The budget for a new car could be used to buy a higher specification used car, or even as a deposit on a lease or finance deal, but which is right for you?
First up, have a look at our Car Reviews section and work out a shortlist of vehicles that suit your needs.
For a £7,000 budget
Buying a new car outright here is probably out of the equation unless you’re in the market for a Suzuki Celerio or Dacia Sandero.
If neither of these cars are what you’re looking for, your main options include buying second hand or taking out a finance deal by using the money you have as a deposit. Factor in the value of your current car too, if applicable (you can get it valued here).
Buying second hand
Brand new cars start to lose value straight away, dropping up to two thirds of their original value in the first few years.
The advantage of buying a used car, particularly if it’s more than three years old, is that the rate of depreciation will have started to slow down significantly.
As a used-car buyer you can pick up a bargain in exchange for taking a few risks, not least the possibility of aging parts failing due to the amount of miles they have already done, or because the car hasn’t been properly maintained or serviced.
Make sure you inspect the car thoroughly before buying and always carry out a history check to make sure it hasn’t been written-off or stolen.
For example, we’ve found a four-year-old Skoda Octavia with just 17,000 miles on the clock in our Cars for Sale section, which you could buy for £6,895. The practical hatchback has a 1.6-litre diesel engine and comes in SE spec*.
Pay it off monthly
An option which is increasing in popularity and doesn’t require a huge deposit (and sometimes no deposit at all) is Personal Contract Purchase (PCP).
You’ll pay lower monthly instalments than on a traditional Hire Purchase deal, and at the end of the term you can simply hand the keys back or pay a balloon payment and take ownership of the car.
For example, Honda is currently offering a 1.6-litre Civic, valued at £20,820, for 36 monthly payments of £299. Honda will contribute £2,804.40 and you’ll need to find an additional £299 for a deposit. This leaves a final payment of £9,348.87 should you wish to buy the car*.
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The disadvantages of a deal like this include restrictive mileage caps, and like any other finance offer, interest charges that could mean you end up paying more than the value of the car if you buy it outright.
If you want more information about buying on finance check out our article here.
For a budget of £12,000
With a bit more money behind you, the option of buying new becomes more realistic. There are many advantages to buying new, and whether they outweigh the money you will lose through depreciation depends on how much you value them.
One big reason for buying off the dealer’s forecourt is reliability. In theory a new car that has done very few miles will last longer than one which has already covered tens of thousands.
Plus, the warranty that comes with a new car could last up to seven years, so if a major part does break, it could cost little or nothing to get it fixed. It’s worth remembering that not everything is covered by a warranty so it’s worth reading the small print before you part with any cash.
You’ll also benefit from new technology, most notably in the engine department, where lower emissions and better fuel economy could save you money on each mile you drive.
Semi-autonomous driving has come on leaps and bounds in recent years and chances are you’ll find an automatic parking system or adaptive cruise control somewhere in a new car’s range too.
As well as convenience, safety technology has also improved, with cars that can keep you between the white lines on the motorway or apply the brakes before a collision.
For £12,000 you can afford a lot of great cars, and we’ve picked out the most popular motor in the UK, the Ford Fiesta. Easily within budget here is either a Studio or Style spec car with a 1.25-litre petrol engine.
Of course with a bigger budget you have more options in the used market too. We found a three-year-old, 2.0-litre diesel Seat Leon FR in our Cars for Sale section for £12,000, with just over 17,000 miles on the clock*. The equivalent brand new car would cost more than £20,000.
If you’d like to see more deals, check out our weekly deal watch here.
Need more help? Maybe the below articles can help…
What happens at the end of a PCP deal?
Looking to save money? Should you go diesel or hybrid?
We look at why you should buy a 65-plate car
Real-world versus claimed fuel economy
We examine the small print of dealer finance
* Deals are correct at the time of publication
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