How to determine your budget
There is more to the costs of owning a car other than the asking price. It is also worth considering the cost of keeping the car safe on the road. Even if the car is as solid with no known faults, it will require maintenance and looking after. Knowing the future costs of owning a car places you one step ahead and budget for contingency money when parts need replacing.
A cheap car to buy may not equal low running costs. After doing a bit of research, more expensive make and model may be cheaper to run long term. Various car cost calculators can be used as a guide. To get the most accurate estimation of how the car truly will cost to keep on the road, follow our 6 step check list and gather the relevant data.
Insurance and break down cover
Read our Insurance article to get the best insurance price
Fuel and engine size
There are two main types of fuel available in the UK - petrol and diesel. Petrol engine cars generally are cheaper to buy, but will have less miles to the gallon. Diesel cars have better miles to the gallon compared to petrol cars, but need regular motorway driving. A DPF (diesel particle filter) is installed in the exhaust to clean the air of impurities. The A Filter regenerates itself during sustained motorway driving. Without regeneration the exhaust filter will clog up and either need cleaning or replacing altogether. Depending on the car, can cost £2000.
Generally speaking, depending on your driving style, more powerful engines use up more fuel. A good indication is the CO2 emission of the engine. This information can be found from the car manufactures. Diesel cars have lower CO2 levels and have lower car tax rates.
The CO2 level of the car engine will affect the amount of road tax you'll have to pay. You may end up buying a car for £1500 and find that the annual tax bill to be £505, every year. This is subject to change in government policy and could go up.
There are exemptions to the VED (vehicle Excise Duty). To promote more efficient cars, the current level of exemption is if the car emits less than 100g/km.Cars constructed before 1 January 1974 are also exempt for VED. The government considers cars of this age to be part of the country's heritage.
Obtain from manufacturers information and a cars service book the frequencies of minor and major services and ask your local motor service garages for the different types of service. Check to see if the car you are buying will require a service soon. More modern car shave what is known as “conditional servicing” and the computer will tell you when it is needed, based on factors read by the engine management system.
Car modifications can increase efficiency and reduce fuel consumption. Car modification can increase insurance premiums.
Parking and congestion charges
Some places require a parking charge of parking permit to park your car. Find out what these charges are likely to be and factor them into your budget.
If you drive into the capital regularly, you may need to pay a congestion charge. Some cars are congestion charge exempt. Congestion charge policies change and your car may be exempt one year and not the following years.
The majority of cars lose a lot of their value in the first 4 years. Older cars with less efficient engines can cost more to run, but depreciate less. If you have your heart set on a particular make and model, consider on older year of manufacture. A well looked after car with full service history will depreciate less than a new car.