Be it a brand new or second-hand model, a car purchase is one of the biggest financial outlays you might go through.
Perhaps a TV ad has inspired you, or maybe there is a manufacturer you simply love. Whatever leads you to making your choice, it is always important to remember the additional costs associated with your purchase. The car may seem a bargain on the forecourt or on the internet, but could a few other factors drive up the total and make you consider a different vehicle next time?
Read on to discover the costs to keep in mind when buying a new or used car.
You most certainly do. This is one of the main costs associated with buying a new or used car, and just last week, we demonstrated different ways of getting a cheaper insurance policy. Costs vary due to a variety of factors, so it is worth bearing these in mind when buying a car.
To get the best deals, it is worth shopping around and ensuring your information is accurate, as mentioned in our previous blog.
The average car insurance policy in the UK is currently £412, and whilst many costs are rising, this is actually 10% lower than it was at the end of 2020.
Just as important as insurance is car tax. When purchasing a car, this can be one of the biggest outlays, so it is important to check which tax rate your car will fall into. When the vehicle is first registered, tax costs significantly more than when you renew it each year.
This charge is based on the car’s CO2 emissions. It can be as low as £10, but as high as £2,365. This cost can be spread monthly, but does incur an additional charge, meaning your tax will be a little higher than if you pay the annual amount in one go.
When it comes to the second year of tax, if the annual amount is £165, a monthly payment plan could increase the total to £173.25.
An additional aspect to consider is the value of the car you are looking to purchase. If the vehicle has a list price of over £40,000, you will have to pay an extra £355. However, if you keep the car beyond 5 years, you will receive a reduction to the standard yearly rate. Some used cars don’t require any tax at all, so this is always worth investigating.
The type of fuel your car requires should be a key factor in deciding on what type of vehicle you buy. We have compiled some facts about the pros and cons of both in our recent diesel or petrol article.
Ultimately, the fuel choice comes down to you and how much you want to initially spend. Diesel cars cost a little more, but can be sold on for a higher price. Petrol cars, on the other hand, are slightly more eco-friendly and won’t cost as much. In terms of consumption, petrol cars tend to use up their fuel quicker, meaning that long term the expense may be higher.
It is also worth remembering that repairs to diesel cars can cost more than petrol cars.
When deciding on petrol or diesel, you should also look at the MPG. You could be spending less on fuel each time you fill up, but you might have to fill up more frequently, meaning you spend more overall.
You may have found a car that looks great, is affordable and seems to be quite economical. Several boxes have therefore been ticked straight away. However, a major repair could end up costing more than the car itself. To save money, you can look at an extended warranty when buying from a dealership. This means you can make a one-off payment to cover you against the cost of several types of repair.
When the need to repair does crop up, it is worth considering independent garages, as they tend to be cheaper and. In some cases, an independent garage could be up to 30% cheaper than a manufacturer-affiliated repair centre.
An MOT is a cost you simply must bear when buying a new or used car. Without one, you cannot legally drive on the road. If you do drive without a valid MOT, you could face a substantial fine in the region of £1,000. Holding a valid MOT is mandatory for all cars over three years old. Sometimes, when purchasing a car, you will find it has 6 or 12 months of MOT remaining.
The current maximum charged for an MOT is £54.85, but the price will depend on your vehicle type. A full list of prices is available on the government website.
These are just the main costs associated with buying a car. The list could potentially be endless depending where or who you buy from. With Euphoria Finance, you can put full faith in us providing you with the fast car finance to secure the car you need. Every vehicle that we have is passed through stringent checks to ensure you are safe on the road and can be kept away from any excessive additional costs. We specialise in poor credit car finance as well as securing new car finance deals. If you are looking for your first car, we are experts in helping you get on the road, too. First car finance has been a successful part of our direct lending finance. Contact us for a free quote today, and be on the road sooner than you think.