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
May 18, 2021

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 taking out car finance, as 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 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 £5,495
Monthly finance from £111*

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.

VAUXHALL CORSA BUYERS' GUIDE

2. Dacia Sandero

Used deals from £5,945
Monthly finance from £111*

The Dacia Sandero is famous for being the cheapest new car on sale in the UK, but this doesn't necessarily make it the worst car on sale. Sure, the most basic new models that cost £7,995 don't come equipped with air-conditioning or even a radio, but there are better equipped models available on the used car market for far less than that.

You can expect to find what were once top of the range models for around £100 per month. These do include features such as a radio and air-conditioning, so there's no excuse to go without, even if you're trying to stick to a tight budget.

DACIA SANDERO BUYERS' GUIDE

3. Skoda Citigo

Used deals from £5,190
Monthly finance from £100*
The little Skoda Citigo is a fun and stylish enough first car for image-conscious young drivers, but it's also safe and sensible enough to please many parents, which is handy if yours are helping you to get your first car. The Citigo should also appeal to those downsizing from a larger car, the interior has a big car feel and quality to it despite those small dimensions.

It's also based on the same foundations as the Volkswagen Up, a car known for its build quality and reliability, so there are no worries here that this cheap small car might prove to be problem down the line.

SKODA CITIGO BUYERS' GUIDE

4. Fiat Panda

Used deals from £4,900
Monthly finance from £116*

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.

FIAT PANDA BUYERS' GUIDE

5. Kia Picanto

Used deals from £5,250
Monthly finance from £118*

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.

KIA PICANTO BUYERS' GUIDE

6. Seat Ibiza

Used deals from £6,495
Monthly finance from £142*

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.

SEAT IBIZA BUYERS' GUIDE

7. Vauxhall Astra

Used deals from £6,250
Monthly finance from £146*

The Vauxhall Astra is one of the best cars of this size if you're looking for a car with lower running costs. It's available with a choice of efficient turbocharged petrol and diesel engines, each delivering highly impressive fuel economy figures - especially if you're intending to cover high mileages. A large touchscreen media system dominates the dashboard and there has been a general step up in quality compared to previous generations.

It's bigger than other cars in this price range, too, so it's ought to be a strong contender if you're looking for a bit of extra space.

VAUXHALL ASTRA BUYERS' GUIDE

Best first car finance under £150 a month

1. Suzuki Swift

Used deals from £6,400
Monthly finance from £125*

This little Suzuki Swift 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 nippy. The Swift's boxy shape makes it easy to get into, but it does cut interior space.

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

SUZUKI SWIFT BUYERS' GUIDE

2. Ford Fiesta

Used deals from £5,980
Monthly finance from £140*

The Ford Fiesta has spend a long time as Britain's most popular car, and 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. It offers better overall quality than the Suzuki too.

Diesel and petrol engines provide good fuel economy, but its downfall is its dated interior and lack of space in the back. Otherwise it’s a class act through and through.

FORD FIESTA BUYERS' GUIDE

3. Audi A1

Used deals from £9,000
Monthly finance from £191*

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.

AUDI A1 BUYERS' GUIDE

4. Mini Hatchback

Used deals from £8,999
Monthly finance from £180*

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.

MINI HATCHBACK BUYERS' GUIDE

5. Volkswagen Polo

Used deals from £6,995
Monthly finance from £163*

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. 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.

VOLKSWAGEN POLO BUYERS' GUIDE

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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