First car finance

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

Murray Scullion
Mar 2, 2018

Passed your theory? Aced your practical? Then you’ll be looking for your first car. Naturally you’ll need something reasonably priced, reliable, cheap to run and insure, as well as stylish.

Using finance might seem formidable at first, it can be an affordable way to get a new, or nearly new car, with reasonable monthly payments.

There are a variety of different ways to finance your first car purchase, outlined below:


First car finance options

First car finance PCP

Personal Contract Purchase (PCP) is flexible with low monthly payments that don't cover the full cost of the car.
At the end, you can return the car or buy it for an additional lump sum. 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) allows the cost of your car to be spread over a series of monthly payments. Once you’ve settled the final instalment, the car is yours. 
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First car finance PCH

Personal Contract Hire (PCH), or leasing, allows you to hire for a period of time while paying a set monthly fee. This usually makes leasing the cheapest way of driving a brand new car. You'll normally find PCH offers restricted to new cars. They typically require a deposit that’s equivalent to three-, six- or nine-months’ worth of lease payments.
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Being accepted for first car finance

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

Different financers offer different rules, but generally speaking, finance can still be given to young drivers if they’re sensible and can afford the repayments.

This includes saving enough for a five to ten per cent deposit, which will give you a much higher chance of being accepted. The same can be said for only picking monthly repayments that are 15-20 per cent of your post-tax income a month. It’s also wise to generally pick monthly repayments of £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 such a priority on having a history of credit and steady repayments. 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 (E.g. 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 nearly new car could be on your (parents') driveway for just £25 a week. And if you've got £200 a month burning a hole in your pocket, you'll even be able to afford a premium brand to make your mates really jealous. 


Best first cars for £100 a month 

Vauxhall Corsa 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 fun as a Fiesta, and not as fashionable as a Fiat 500, but a great in-between. Read more 

Citroen C1

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

Skoda's Citigo is a fun and practical city car that's solidly built and much more fun to drive than you'd imagine. The Citigo is surprisingly comfortable for such a short car and has very supportive seats too. Engines are willing, if slightly noisy, especially on long journeys. Read more


Best first cars for £125 a month 

Fiat Panda

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

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. 2017 models have just started to sneak under the £150 barrier and into the £125 a month range - but you'd better act quickly! Read more 

Kia Picanto

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

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

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

The UK’s best selling car. And it’s easy to see why. It 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 engines should be capable of up to 83.1 mpg, especially good for those travelling a lot of miles. If you need lots of space for passengers then it might not be the best car, but otherwise it’s a class act through and through. Read more 


Best first cars for £200 a month 

Audi A1

For £200 a month you can snag yourself something from a premium brand like Audi. The A1 has a beautifully finished interior in comparison to other small cars, and its sharp styling makes it one of the best looking cars in this segment. 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 Hatch

The fashion-conscious among you may well be aware of the Mini, one of the most iconic British brands in existence. This iteration of the car is bold and distinctive, very sporting (dependent on engine) and offers plenty of tech, with a huge screen on the dashboard. It’s not the most practical car on this list, but that’s somewhat missing the point. Read more 


Volkswagen Polo

We’ve possibly left the most sensible car for last. The Volkswagen Polo is brimming with safety technology such as automated 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. Read more 


First cars available with free insurance

It’s important to remember the other costs when getting your first car. The largest expense associated with first-time buyers is insurance. We’ve all heard horror stories of teenagers being quoted thousands and thousands for insuring a Fiat Punto – but we’ve got news for you. Some cars come with free insurance.

Volkswagen is offering free insurance on its Polo, Seat is offering it on their Ibiza, and French car manufacturers love it too – Citroen and Renault all have deals at the moment. Age limits do apply in some cases, and you'll need to be at least 18 with a clean driving licence.

Peugeot have taken it one step further with its Just Add Fuel deals . Buy a brand new car using this and you’ll only need to make one fixed payment a month, which covers finance, insurance, tax, servicing and breakdown cover. All you need to do is pay for fuel.


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