First car finance

Find a modern car at an affordable price with first car finance

Murray Scullion
Sep 24, 2018

You might have passed your theory and aced your practical, but the most daunting test could still be to come: applying for finance on your first car.

If you haven't got a large savings pot, finance can provide an affordable way of getting a first car, particularly if you're looking for modern features and the latest safety equipment.

Applying may be more straightforward than you might think, thanks to the large numbers of newly-qualified drivers who already finance their vehicle each year. There are a range of options providing affordable repayments and flexibility on a wide range of new and used cars.

If your credit rating isn't yet strong enough to apply for finance on your own, then there is also the possibility of guarantor finance, where a relative agrees to meet the repayments if your situation changes and you're unable to do so.

Scroll down for more information on your options, or click below to search for cars that are available with finance.

First car finance options

First car finance PCP

Personal Contract Purchase (PCP) is flexible with low monthly payments that only cover part of the car's cost (the value that it's expected to lose during the agreement).

At the end, you can return the car or buy it by paying off the remainder of the cost. Depending on the car's value, you may also be able to trade it in, using it as a deposit towards another agreement.

PCP makes it easy to regularly upgrade your car, and is the most popular finance option.
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First car finance HP

Hire Purchase (HP) spreads the cost of your car over a series of monthly payments. Once you’ve settled the final instalment, the car is yours. 
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First car leasing

Leasing or Personal Contract Hire (PCH) allows you to hire a new car for a period of time while paying a set monthly fee. This usually makes leasing the cheapest way of driving a brand new car.

These agreements typically require an initial payment that’s equivalent to three-, six- or nine-months’ worth of lease payments.
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Just add fuel deals for first cars

With a single payment each month that covers finance repayments, insurance, breakdown cover and servicing, Just Add Fuel deals make it easy to budget for your first car. They are offered by Peugeot on brand new cars only, including the 108, 208 and 308. A virtually identical scheme, called SimplyDrive, is available from Citroen and DS.
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Being accepted for first car finance

If you’re one of the 447,442 drivers aged 17-21 who passed your test last year, you might think that you’ll have some difficulties getting finance because of a relative lack of credit history.

Rules vary between lenders but, generally speaking, finance can still be given to young drivers if they can afford the repayments and haven't got a history of financial trouble.

Saving enough for a ten per cent deposit will give you a much higher chance of being accepted. The same can be said for picking a car with monthly repayments that are 15-20 per cent or less of your post-tax income a month. It’s also wise to keep monthly repayments to £200 a month or below, regardless of how much you earn.

Even if all those boxes are ticked, young drivers aren't guaranteed to be accepted for finance at a low rate because lenders place a high value on having a history of credit and steady repayments, which is not always possible at a young age. In this case, guarantor finance may help. 


Guarantor finance

Using a guarantor finance scheme can relieve some of the pressure on young drivers. This works by allowing a guarantor, who is typically a family member, to guarantee the payment of a loan. The loan is paid to the guarantor, and they release it to you.

You’re responsible for making the repayments, but the guarantor has final responsibility for your loan. BuyaCar works with a panel of lenders which offer guarantor car finance. To find out more, call 0800 050 2333.


Best cars for first car finance

Long gone are the days of buying an old banger for your first car. Thanks to the rising popularity of finance deals, a modern car could be on your driveway for just £25 a week. There are currently 853 cars on BuyaCar that cost from under £100 per month on finance, although the exact repayments will depend on the interest rate charged, which is linked to your credit score.

If you've got £200 a month to spend, then your options open up, with vehicles from premium brands, including Audi, BMW and Mercedes available, along with some 2018 models.


Best first cars for £100 a month 

Vauxhall Corsa

Latest Vauxhall Corsa deals from £4,295
Finance from £81 per month

Vauxhall's supermini is one of the best all-round cars that you can buy, offering so much space, equipment and performance that people wonder why they’d need a bigger car. Not as nimble as a Fiesta, and not as fashionable as a Fiat 500, but a great in-between. Read more 


Citroen C1

Latest Citroen C1 deals from £4,295
Finance from £82 per month

Citroen’s second generation C1 is a huge improvement over its last car, with a larger boot, more technology inside, and funky looks that will appeal to all ages. There are two engines available - a 1.0-litre and a 1.2-litre. The first being cheaper and more suited to city driving, the second is a better bet for motorways. Read more 


Skoda Citigo

Latest Skoda Citigo deals from £4,400
Finance from £79 per month
Read more


Best first cars for £125 a month 

Fiat Panda

Latest Fiat Panda deals from £4,000
Finance from £75 per month

The Fiat Panda is a fun and affordable city car that is very similar mechanically to the more expensive Fiat 500. Its upright shape gives plenty of space inside and a light and airy feel, while it’s also cheap to run and has a certain charm about it. Read more 


Suzuki Swift

Latest Suzuki Swift deals from £5,198
Finance from £91 per month

The little Suzuki might just be the most agile and fun car on this list. It’s well known for its ability to dart in and out of traffic with ease, and even the least powerful petrol engine is smooth and quick to rev, which makes the car feel zippy. The car's boxy shape makes it easy to get into, but it does cut interior space.

Previous-generation models are cheapest but some versions of the latest car (pictured), which went on sale in 2017, have just started to sneak under the £150 barrier and into the £125 a month range. Read more


Kia Picanto

Latest Kia Picanto deals from £4,195
Finance from £78 per month

If this car was on The Apprentice, it would say that it’s USP (Unique Selling Point) was its seven-year warranty, which is unmatched by any of its rivals and ensures buyers’ peace of mind in case anything goes wrong. Team that with neat and squatly stylish looks and it’s a real contender for your first car. Read more


Best first cars for £150 a month

Seat Ibiza

Latest Seat Ibiza deals from £5,000
Finance from £85 per month

The Seat Ibiza’s sharply defined lines ensure that it looks distinctive and is one of the most fashionable cars in this price range. It’s fun to drive, and is practical enough for most young families, let alone young people. Petrol engines are zippy and there are a slew of hi-spec options available. Read more


Vauxhall Astra

Latest Vauxhall Astra deals from £5,499
Finance from £100 per month

The Astra is one of the best in its class for running costs, with very efficient turbocharged petrol and diesel engines delivering highly impressive mpg and emission figures. A large touchscreen display dominates the dashboard and there’s been a general step up in quality compared to previous generations. Bigger than other cars in this price range, too. Read more 


Ford Fiesta

Latest Ford Fiesta deals from £5,500
Finance from £92 per month

The Ford Fiesta was britain's best-selling car before it was replaced by a new model in 2017 (which instantly became the Uk best-seller). It's easy to see why. The small hatchback matches the Suzuki Swift mentioned above in terms of agility and being fun to drive, but it’s also stylish and comfortable with low running costs.

Diesel and petrol engines offer good fuel economy. Its downfall is a dated interior and lack of space in the back but otherwise it’s a class act through and through. Read more 


Best first cars for £200 a month

Audi A1

Latest Audi A1 deals from £9,000
Finance from £133 per month

With a budget of £200 a month, you're able to afford a more upmarket badge on your bonnet - such as the four rings of Audi. The company's A1 has a beautifully finished interior in comparison to other small cars, and its mini-Audi styling makes it one of the best looking cars in this segment. If you're looking at a newer model, bear in mind that the car will be replaced by a brand new A1 at the end of the year.

It has a huge selection of petrol and diesel engines on offer, too. Best avoid the Sport suspension; it’s too hard for town driving around the UK. Read more


Mini Hatchback

Latest Mini Hatchback deals from £6,849
Finance from £121 per month

With more character than most cars this size, along with sporty performance that will put a smile on your face, the Mini Hatchback is a fun first car that's reasonably affordable. Strong demand means that it holds its value well, making some finance repayments low. Read more 


Volkswagen Polo

Latest Volkswagen Polo deals from £5,995
Finance from £96 per month

We’ve possibly left the most sensible car for last. The Volkswagen Polo is brimming with safety technology such as automatic emergency braking at low speeds, as well as boasting a very high quality interior. The inside of the car is also relatively large in comparison to rivals, so this is definitely a first car for the more rationally minded.

The latest model (pictured) only went on sale this year, so prices are still high. The older version is a smaller, but still feels solid and comfortable. Read more 


First cars available with free insurance

The hefty insurance premiums charged to young drivers can mean that the finance repayments for your first car are cheaper than the cost of insuring the vehicle.

That's why offers of free insurance are particularly valuable to first drivers, potentially saving more than a thousand pounds in your first year of driving.

There are usually a handful of manufacturers offering a free insurance deal at any time, with Volkswagen, Seat and Renault recently running promotions. Click to view the latest deals. Age limits do apply in some cases, and you'll need to be at least 18 with a clean driving licence.

Insurance is included (but not free) with Just Add Fuel deals.


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