First car finance: starting at less than £100 per month

Find a modern car at an affordable price with first car finance: reliable and stylish cars are available from well under £100 per month

Simon Ostler
Jan 12, 2022

You've passed your test, you've got your licence, and now it's time to get hold of your first car. The most affordable way to do this is to opt for a finance deal, as this will help you to spread the considerable cost of a car into much more manageable chunks - much like your phone contract. However, young drivers are often at a disadvantage when it comes to buying a car on finance, because they haven't had much of a chance to show lenders that they can be responsible with their money and pay back loans on time.

This means that persuading a lender to approve you for car finance as a young driver can be tough, but if you are able to get approved, car finance can provide an affordable and achievable way of paying your first car, particularly if you're looking for one with modern features and the latest safety equipment.

There is a range of options when it comes to which type of car finance to choose. They each provide their own mix of affordability 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 can agree to meet the monthly payments if you fail to do so.

As we've mentioned, car finance is also available on used cars, and used car PCP finance in particular can be a great way to minimise your monthly outgoings - if you aren't dead set on owning the car at the end of your contract. Read on for more information on your first car finance options, and check out a selection of great value deals currently available on BuyaCar.

First car finance options

First things first, we'll make sure you're clued up on all the technicalities of car finance. Whether you decide to go with PCP finance - which offers low monthly payments plus a large optional final payment at the end of the contract that you must pay if you want to own the car - or Hire Purchase (HP) - which comes with higher monthly payments but means you automatically own the car at the end of the contract with no large payment needed - you'll be up to speed in no time and ready to start planning your course to your first car.

Alongside the typical finance options, you might also want to consider Just Add Fuel deals which roll the cost of the car, plus insurance, breakdown cover and servicing into one monthly payment, so all you have to do is pay this and for the cost of fuel.

This kind of deal can make budgeting for your first car a much simpler process, with just the single number to worry about. Since this is only available on new cars, however, and includes many elements in the one payment, don't expect that monthly payment to be cheap.

Guarantor finance

Going for guarantor finance can take some of the stress out of getting car finance for young drivers. This works by ensuring that the guarantor, who is typically a family member, makes the monthly payments if you fail to do so. The loan is paid to the guarantor, and they release it to you.

You’re responsible for making the payments, but the guarantor has final responsibility for your loan - if you miss a payment, it's down to the guarantor to pay it. Be aware that if they fail to do so it can also negatively impact their credit score as well as yours. BuyaCar works with a panel of lenders which offer guarantor car finance.

Best first car finance under £100 a month

1. Vauxhall Corsa

Used deals from £4,695
Monthly finance from £142*

The Vauxhall Corsa is a popular and capable supermini that has long proved to be one of the best all-round cars you can buy at this kind of price range. It's a small hatchback, but it still offers plenty of interior space for its size, while it also features a good level equipment that makes you wonder why you'd ever need a bigger or more expensive car.

In terms of driving, the Corsa is not as nimble as a Ford Fiesta around corners, and you not might not consider it to be as fashionable as a Fiat 500, but in terms of value for money, it's a strong choice.


2. Fiat Panda

Used deals from £5,895
Monthly finance from £0*

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 no-nonsense charm about it. If you want a small car that's easy to drive but offers lots of space for tall mates, the Panda is a good bet.


3. Kia Picanto

Used deals from £6,629
Monthly finance from £194*

If the Kia Picanto was on The Apprentice, it would say that its USP is the seven-year warranty that accompanies it as a new car. Such a long period of protection is virtually unmatched by any of its rivals, which makes the Picanto an interesting proposition if you like to know your investment is safe. The fact manufacturer warranties transfer with the car means that even four-year old models will benefit from a remaining three years of warranty cover. 

Aside from its warranty, the Picanto has earned its place among a list of rivals including the Volkswagen Up and Skoda Citigo, with a stylish interior and punchy engines.


4. Seat Ibiza

Used deals from £5,700
Monthly finance from £198*

There's no doubt the Seat Ibiza has been designed with young people in mind. Its distinctive looks make it one of the more striking cars in this price range. It’s also fun to drive, and is practical enough for a small family, let alone a student travelling to and from university. It's a relative of the Volkswagen Polo and makes use of high-quality components and zippy petrol engines; this car is much better than its low price might suggest.


Best first car finance under £150 a month

1. Ford Fiesta

Used deals from £4,750
Monthly finance from £178*

The Ford Fiesta has been one of Britain's most popular cars for a long time, and it's easy to see why. It generally feels like a better quality car than most alternatives of a similar size and age and, considering how affordable it is, the Fiesta is an incredibly enjoyable car to drive. The engines are small but pack enough punch to offer decent acceleration, while it's possible to go round corners at surprisingly high speed if you really want to.

Aside from the driving thrills, the Fiesta is also stylish, comfortable and cheap to run thanks to cheap insurance and tax costs. The diesel and petrol engines on offer provide good fuel economy, too. This cheaper (and older) version of the Fiesta does feel a touch dated compared to more recent models, but it's still very good for the price.


2. Audi A1

Audi A1 front

Used deals from £8,000
Monthly finance from £205*

With a budget of £150 per month, you're able to afford a more upmarket badge on your bonnet - such as the four rings of this Audi. The A1 has a beautifully finished interior in comparison to other small cars, and its junior Audi styling makes it one of the best looking cars of this type.

As there is now a newer version of the A1 on sale, this previous model is better value than before, too. The original A1 has a huge selection of petrol and diesel engines on offer, too. Best avoid the Sport suspension, though; it’s too firm for town driving around the UK.


3. Mini Hatchback

Used deals from £7,500
Monthly finance from £280*

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 PCP finance monthly payments lower than you might expect, too.


4. Volkswagen Polo

Used deals from £6,450
Monthly finance from £237*

We’ve possibly left the most sensible car for last. The Volkswagen Polo is brimming with safety technology such as autonomous emergency braking at low speeds, as well as boasting a very high quality interior. It's spacious, too, compared with its rivals, so this is definitely a first car for the more sensible driver.

The Polo offers a very similar standard of quality to the Audi A1, but at a lower price. The latest version (pictured) is the best yet by far, and early 2018 models are close to dropping below the £150 per month threshold, so keep an eye out for a great deal.


Representative PCP finance - Ford Fiesta Titanium:

Monthly payments over 48 months: £192
Deposit: £0
Mileage allowance: 8,000 per year
Optional final payment to buy car: £2,923
Total amount payable to buy car: £11,926
Total cost of credit: £2,426
Amount borrowed: £9,500
APR: 9.9%

Buyacar is a credit broker, not a lender. Our rates start from 6.9% APR. The rate you are offered will depend on your individual circumstances.


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