Your first car

The Choice

The first task is to identify what kind of car you want. Be honest with yourself and make sure you are realistically operating within your budget. Take into account servicing costs, fuel bills, insurance, road tax and any road tolls you may have to pay. Your final balance available may not be as big as you at first thought.

Modern ‘supermini’ cars like the Ford Fiesta, Citroen C3, Volkswagen Polo and Vauxhall Corsa all offer the sort of space and refinement that our parent’s luxury saloon cars used to offer with the added benefit of low fuel bills, especially if you choose to opt for diesel versions. With the vast majority of cars now available as diesel versions, the savings are plain to see and you’ll get a better price for a diesel when the time comes to sell it on.

Where To Buy

Most first time buyers will look no further than their local franchised dealer, and if you want a low-hassle, safe way of buying a car this is still the tops. With nothing to part exchange, however, you may well find other avenues that can offer savings. Independent dealers can slash a lot from the sticker price of your chosen new car, but you may have to do a fair amount of phoning, web browsing and legwork, plus you may have to wait for some time and be prepared to compromise on the exact colour or trim level.

An alternative is to shop at a car supermarket that has already done a lot of the donkeywork in bringing cars in from Europe or sourcing them in the UK. Although you’ll have to pay a middleman’s cut and still be restricted in terms of choice, there are some good savings to be had if you’re not too finicky about trim and colour details.

Insurance

This is a biggie. If you’re young, have recently passed your driving test, the Association of British Insurers are going to see you as a very bad risk indeed and ratchet up the price of a year’s cover. There’s little to be gained by piggybacking onto a parent’s policy as a named driver as many insurers are wise to this and will not only ramp up the price of your parent’s policy but you’ll also run the risk of ruining their no claims bonus if you have a prang. The flipside of this is that you will be missing out on building a no-claims discount of your own, so the best thing to do is accept that it may be a few years before you can own something with a high insurance rating and plump for something modest.

There are a few things you can do to help. Certain occupations will ‘load’ your policy and a certain degree of entirely legal vagueness can help when filling in your form. For example, a sub editor in a newspaper office would see his premium shoot through the roof if he called himself a ‘journalist’, but would remain at far more manageable levels as an ‘office assistant’.

Likewise, if you have two places of residence, it could well be beneficial to check which the insurance companies rate as a better bet. Tread carefully here, as a canny insurance assessor will not be amused to find you registering your car at a property where you are resident for only five per cent of the time. Get as many quotes as you can – as different companies may well vary wildly in how much they charge. Use one company’s quote to beat another down in price.

Finance

This can be a minefield. You’ll need to understand the difference between good credit and bad credit and realise that not having a pile of cash up front rarely diminishes your bargaining power. When you buy a car in finance, the dealer actually sells the car to the finance company, which, after deducting your deposit, pays the balance to the dealer in a day or so. In addition, dealers usually receive an administration fee from the finance company for the work they do in setting up the account. In short, your local garage will be just as keen to cut a deal, however you choose to pay.

Take a little time to consider your options, however keen you might be to get behind the wheel. It might sound obvious, but be clear about exactly how much you can afford. Work out your monthly outgoings - miss nothing out - and subtract the total from your monthly income. Leave a small surplus to cover any extras - loan protection insurance and documentation fees for example.

There's the period of the loan to decide upon too - usually one, two or three years. Obviously, the longer you take to repay, the more interest you'll end up having to cover; be clear about what you're taking on and opt for the shortest repayment period you can manage.

Tips and Tricks

• Check the terms of zero per cent finance carefully. The laws of supply and demand dictate that if a car needs to be shifted on the cheap there’s a very good reason why.
  
  
• Often dealers use this short-term tactic to shift stock that’s either very unpopular or coming to the end of its life. Either way you’ll end up saddled with the bill in terms of depreciation when the time comes to sell.
  
  
• Certain manufacturers are known for their flexibility when it comes to bargaining and their ability to offer attractive incentives. Citroen and Mitsubishi immediately spring to mind but there are others. Young drivers can make big savings on periodical free insurance offers.
  
  
• Do your homework. Turn that guy in the shiny suit from a car salesman into a mere facilitator. If you know your onions, he shouldn’t be able to ‘sell’ you anything. You’re in charge!
  
  
• Don’t be talked into specifying your car with hordes of options and gadgets as you’ll only recoup a tiny fraction of this money when the time comes to sell. Whilst you won’t lose your shirt on air conditioning, metallic paint and a CD stereo, pricey extras like satellite navigation, electric sunroofs and rear parking sensors won’t add too much to the eventual value.
  
  
• Get an extended test drive if possible. Ensure you’re fully covered to drive the car, make sure you understand the controls and choose a varied driving route. Compare the car with a competitor, never buy directly after taking your test drive and don’t feel obliged to buy the car because the dealer was nice enough to let you drive it for the weekend. Once again, you’re the boss.
  
  
• The 1.2-litre S version with comprehensive insurance is always going to be a better bet for a young driver than the 16-valve 1.8 GTi sport version that means you’ll
  only be able to afford third party insurance.
  
  
• Think carefully about colour. Garish yellows and pinks can be difficult to sell on, whilst the industry uses terms like ‘Doom Blue’ to denote dull non-metallic navy. Silver cars are currently in vogue but avoid white when looking at small cars. Avoid brown and boring greens if you want the widest possible audience when the time comes to trade up.

In closing, don't be rushed into any decision or choice and remember, a positive attitude can help keep you in the right frame of mind throughout.

Published: 8th July 2008