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

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

Murray Scullion
Feb 28, 2019

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 one with modern features and the latest safety equipment.

There are a range of options providing affordable repayments and flexibility on a wide range of new and used cars. And 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.

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. 

First car leasing

Leasing, otherwise known as 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.

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, including the 108, 208 and 308. A virtually identical scheme, called SimplyDrive, is available from Citroen and DS. Volvo has its own scheme, named Care by Volvo. It offers this for all of its cars.


Being accepted for first car finance

If you’re one of the 447,442 drivers aged 17-21 who have passed their test recently, 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 842 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.

Best first cars for £100 a month 

Best first cars for £125 a month 

Best first cars for £150 a month 

Best first cars for £200 a month 


Best first cars for £100 a month 

1) Vauxhall Corsa

Latest Vauxhall Corsa deals from £4,000
Finance from £77 per month

Vauxhall's supermini is one of the best all-round cars that you can buy for this price range. Cars like this offer so much space, equipment and performance that people wonder why they’d need a bigger car. It's not as nimble as a Fiesta, or as fashionable as a Fiat 500, but it's a great in-between.
Vauxhall Corsa buyers' guide


2) Dacia Sandero

Latest Dacia Sandero deals from £4,195
Finance from £77 per month

The Dacia Sandero is officially the cheapest new car for sale in the UK, with an eye-catching price tag of £6,995. And while that is inexpensive, you won’t find a new one for less than £100 a month.

On the used market you can expect to find three-year old models for less than £100. These are better equipped than a new £6,995 Sandero too - as they typically come with alloy wheels, air con, and electric windows.
Dacia Sandero buyers' guide

3) Skoda Citigo

Latest Skoda Citigo deals from £4,699
Finance from £79 per month
The little Citigo is a fun and stylish enough first car for the image-conscious youth, but safe and sensible enough to appeal to those downsizing from a larger car. And while it’s a tiddly city car, the interior has a big car feel to it too. Skoda Citigo buyers' guide


Best first cars for £125 a month 

1) Fiat Panda

Latest Fiat Panda deals from £4,450
Finance from £83 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 no-nonsense charm about it. 
Fiat Panda buyers' guide

2) Suzuki Swift

Latest Suzuki Swift deals from £5,495
Finance from £103 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.
Suzuki Swift buyers' guide


3) Kia Picanto

Latest Kia Picanto deals from £4,169
Finance from £78 per month

If this car was on The Apprentice, it would say that it’s USP (Unique Selling Point) is 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.
Kia Picanto buyers' guide


Best first cars for £150 a month

1) Seat Ibiza

Latest Seat Ibiza deals from £5,495
Finance from £91 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.
Seat Ibiza buyers' guide


2) Vauxhall Astra

Latest Vauxhall Astra deals from £4,990
Finance from £91 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.
Vauxhall Corsa buyers' guide


3) Ford Fiesta

Latest Ford Fiesta deals from £4,998
Finance from £94 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's 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. 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


Best first cars for £200 a month

1) Audi A1

Latest Audi A1 deals from £7,399
Finance from £118 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 Audi junior styling makes it one of the best looking cars in this segment. A brand new A1 has just been released too, which should drive down the price of this old model. 

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.
Audi A1 buyers' guide


2) Mini Hatchback

Latest Mini Hatchback deals from £6,995
Finance from £84 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 too.
Mini Hatchback buyers' guide


3) Volkswagen Polo

Latest Volkswagen Polo deals from £6,236
Finance from £106 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 only went on sale last year, so prices are still relatively high, but expect base-spec models to dip below £200 a month.
Volkswagen Polo buying guide


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 free insurance 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.


Latest car buying advice

  1. Cash vs finance: how to budget for a car

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  3. Second-hand HP (Hire Purchase finance)

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