The ultimate guide to buying your first car

Jump to
New or used
Cash or finance
What car?
Where to buy from
What to check
Extra fees
Car insurance

Here at Cuvva, we've been putting together a series of guides on learning to drive. It's something we hope will help young drivers pass their theory and practical tests, before hitting the road with confidence.

If you've passed your tests and are ready for the next step, we've got you covered too! Check out our ultimate guide to buying your first car.👇

New or used?

One of the biggest things to consider when buying your first car is whether to buy brand new or second-hand.

The obvious difference here is price — these days, it’s quite hard to find a new car for under £10,000. But on the used car market, you can find a massive variety of cars for under £2000.

We reckon a used car is probably the best bet for first time drivers. New cars lose their value quite quickly in the first few years. Plus, you might have a few bumps and scrapes as a new driver (it happens to the best of us!) — so a cheaper car is less risky.

But it’s not a complete no-brainer. There are some benefits to buying new, even if you’ve just passed your test. You won’t have to fork out for an MOT for the first few years, and a lot of dealerships offer a year or two of warranty if anything goes wrong. That’s unlikely though — you shouldn’t have any mechanical issues with a brand new car.

You’ll also have more financing options with a new car, so you won’t always have to pay the full price up front. We’ll go into some of those options below.

Cash or finance

There are two different options here: paying in cash, or getting car finance.

If you pay for your car upfront, you can get the payment over and done with, and you won’t have to think about credit scores, deposits, or being in debt.

But for a lot of people, it might make more sense to split the cost of a car into more manageable payments. There are a few different financing options:

Hire Purchase: This is basically where the dealership (or finance company) gives you a loan for the full cost of the car. You pay a deposit, followed by monthly payments.

You won’t be able to sell the car until you’ve paid it off in full. But once the balance is paid, you own the car outright.

PCP (Personal Contract Purchase): A PCP agreement is a fixed term hire contract, usually between 12 and 48 months long. Once the contract is up, you can decide whether to give the car back, or buy the car in full with a lump sum payment.

It’s a bit like Hire Purchase in that you’ll pay a deposit followed by monthly payments.

But the monthly payments are usually lower, because you’re not actually paying off the full value of the car — you’re just paying the interest on the loan, and the expected depreciation value (how much value the car loses while you have it).

PCP is great for drivers who like to change their car regularly. But there are a few limitations — you’ll often have a mileage limit, and you could be charged for any damage to the vehicle.

Personal Contract Hire (PCH): PCH is pretty similar to PCP, but there’s no option to buy the car at the end of the agreement.

It’s basically just a long-term car rental — and monthly fees are usually a bit lower than PCP. But it’s important to know that most PCH agreements won’t let you return the car early.

It’s easier to finance a brand new car

As we mentioned, getting finance on a new car will probably be quicker and easier than with a used car.

But some dealerships will provide used car financing. And if that’s not available for the car you want, you might be able to get a car loan from your local bank or credit union.

Buying your first car is a great feeling

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What car?

We’re sure you’ve got great taste in cars — but when you’re a first time driver, there’s a few more things to keep in mind.

The main thing you want to look at is the cost of the car, and the cost of the extras.

You might find a great deal on the car itself, but if it costs an arm and a leg to run, it might not be the most sensible choice.

We’ll go into tax and fuel a bit later. But for now, a car’s insurance group is one of the most important factors in how much you’ll pay each year.

The cheapest cars to insure tend to be sensible cars with less powerful engines (not always) but insurers also look how much it might cost to repair the car if it gets damaged, and what safety features the vehicle has.

You can get information about a car before you go to see it

Before you take the time to go and test drive a car, there are a few important checks that you can do from the comfort of your own home.

You can use our free car checker to have a look at the vehicle’s MOT and tax details, as well as its insurance group.

You’ll also want to make sure that the car isn’t stolen or unsafe. Head over to the GOV.UK website to find out how to do that.

A HPI check can also provide some more detailed information on a vehicle’s history. This can give you valuable peace of mind when buying a new car. But they cost around £20 — so best to wait until you’ve seen the car and you’re sure that you want to buy.

(Looking for some extra reading on which car to buy? Check out our guide on our favourite affordable electric cars here).

Who to buy from

These days, most people look for cars online. You could go directly to a dealer, but a listing site like Autotrader and Gumtree will give you loads more choice.

You’ll see both private sellers (individuals selling their own cars) and trade sellers (who buy and sell vehicles professionally).

Some people prefer to buy from private sellers, because they’re likely to know more about the car, and (hopefully!) would have looked after it personally.

But trade sellers have more experience in the industry, and they’ll probably need to stick to certain legal standards. You’ll also have more recourse if anything goes wrong.

We’d say that either type of seller is fine. But in both situations, there are quite a few important checks to carry out before you sign and pay.

Get that new car feeling!

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What to check when buying a car

There’s a lot to look out for here. We’ll go over some of the things that you should check, but we’d recommend taking a more experienced driver with you when you go for a test drive. And if you really want to be sure that the car doesn’t have any hidden faults, it might be worth paying a mechanic to check out the car before you buy it.

Look at the exterior Ideally, you’ll want to go and see the car in the daytime, and when it’s not raining. This will allow you to see the paintwork and glass properly, and any scratches or blemishes will be fully visible.

Then check the inside of the car Have a look at the seats and other surfaces in the car. Ideally, there won’t be any rips, stains or other damage. Take a mental note of how clean the car is — this might indicate how well the previous owner has cared for it.

Make sure all of the gadgets work properly Check the wipers, lights, and air conditioning to make sure they work. If your car has a GPS or entertainment system, have a look at that too.

Look at the engine Open the bonnet and have a look at the engine. Ideally, everything will be clean with no rust. This is also a good time to check the oil, water, and coolant levels.

When you turn the engine on, check there’s no warning lights on — they could indicate mechanical problems that could be expensive down the line.

Check the paperwork Ideally, the car will have a full service history and MOT history. If it doesn't, there could be some unknown problems. The owner should also have a V5C for the vehicle. (More about that here).

Used cars won’t always be perfect Small issues that aren’t safety related won’t always be a dealbreaker. But make sure you note these to the seller — this might help you negotiate the price later on.

The test drive

You’ll definitely want to take your potential new car for a spin before you buy it. Don’t forget to get insured first!

When you’re on the road, keep an ear out for any unusual knocks or noises (it’s best not to play the radio while on a test drive). Check the brakes as you go, and make sure the car doesn’t pull to either side when stopping.

You should also practice on different road types, so you can get an idea of how the car performs at different speeds. Try to get to a dual carriageway or motorway if you can.

Finally, you might want to see how you feel about the car and how it drives. Ideally, you’ll feel safe, comfortable, and confident with the controls. That last part might not be as important, though. You’ll most likely build more confidence as you adjust to your new car.

Ultimately, there will always be some unknowns when you’re buying a used car - but by checking everything carefully, you can reduce the risk of anything going wrong.

See if you can negotiate

Negotiation is quite common when you’re buying a car — so you might be able to get a bit of a discount on the list price.

Some sellers (and some dealerships!) will expect you to haggle a bit. It might not always work, but it’s definitely worth a go.

Also, don’t feel pressured to buy the car on the spot. Often, sellers will encourage potential buyers to sign on the dotted line and drive off straight away. But if you’re not completely sure, it’s better to go away and think about it first.

Remember those extra costs

So, you’ve bought your dream car. But you're not quite done yet — there’s a bit more to think about.

These days, the cost of owning a car can be quite significant. If your car is on the more affordable side, you might even pay more for yearly upkeep than you paid for the vehicle itself.

Some ownership costs (like parking, or the congestion charge or ULEZ if you live in London) will be the same for most cars.

But there are some others that can vary depending on what car you get.

Tax Vehicle tax rates usually depend on engine type, fuel type, and CO2 emissions. These days, the greener your car is, the less you’ll pay in tax.

Some ultra low emissions vehicles (and all electric vehicles) are tax free — worth keeping in mind.

(Check out our free car tax checker!)

Fuel Typically, cars with bigger engines use more fuel. You can get an idea of how much your petrol will cost by using an MPG (miles per gallon) calculator online.

Just so you know, the sale of new petrol and diesel cars will be banned in 2030, with hybrids following in 2035. So if you have a charging point near you, and you drive less than 100 miles per day, an electric car might be a good investment for the future.

Insurance

This is the big one. In the UK, car insurance premiums can be seriously high.

You'll need drive-away insurance to get your new car home, and then you'll need longer-term insurance.

At Cuvva, we have you sorted at every step of the way, from temporary car insurance for getting your car home, to our no deposit monthly insurance, with rolling payments and no nasty hidden fees.

Whatever you're after, getting a quote only takes a few minutes!

Updated on 7th July 2022