How to find the right car for your budget

Buying a car is one of the biggest purchases you will make. However, once you have bought your car, you have to keep it on the road. It’s important to think about how much this is going to cost in the long run.

Work out your budget for buying a car

Your budget will determine whether you can buy new or used and how much you can afford in running costs.

It’s crucial that you are realistic about your budget. Over-extending yourself can lead to problems later on – particularly if you have little or no savings and your income drops unexpectedly.

Use our simple Budget planner to work out how much you can afford to spend buying a car. It takes just a few minutes.

Use our Quick cash finder to discover how much you could start saving towards your new car. It only takes five minutes.

Work out the running costs

Once you’ve worked out how much you can afford to spend buying your car, make sure that you can also afford to run it. It’s worth bearing in mind that UK motorists spend an average of £3,500 a year on running costs. (Source: survey by Webuyanycar.com, November 2013.)

For help working out a car’s running costs, try our Car costs calculator tool.

If you know the different types of running costs to allow for and just need help calculating them, try using the calculator on the This is Money website.

Used cars can often cost more to run than new cars if you don’t take depreciation into account.

As a basic comparison, here is an example of running costs for a used car and a new car in Year 1 after purchase.

Used car running costs, Year 1

£4,526 per year, made up of:

£919 – fuel based on 10,000 miles per year

£500 – insurance

£642 – servicing/maintenance

£20 – vehicle tax

£2,445 – estimated annual depreciation

New car running costs, Year 1

£9,264 per year, made up of:

£919 – fuel based on 10,000 miles per year

£500 – insurance

£300 – servicing/maintenance

£10 – vehicle tax per year

£7,600 – estimated annual depreciation

The figures above are based on a new car worth £14,000 and a comparable 2011 used car with low mileage.

So although the used car costs more to run, the new car will lose more of its value during the year.

Find out more about how car depreciation works.

How to find the right car

Top tip

Don’t let your heart rule your head. If you can’t afford your dream new car, consider a nearly new or used car. Find out more about nearly new cars on the Which? Car website.

Unless you already have a car in mind, start looking at cars on the road, at your local car dealers, in car magazines and on motoring websites (see ‘Comparing cars’ below).

You could also ask friends, family and work colleagues for recommendations.

Top 10 questions to ask yourself

Now that you’ve made sure you can afford a car, it’s time to find out what you can buy within your budget.

But first, ask yourself the following questions so that you don’t overlook any of your essential practical needs when choosing your car:

  • Do I need to keep running costs such as tax, insurance and fuel to a minimum?
  • Do I want a car that will hold its value well?
  • How much space do I need for passengers, including perhaps a dog?
  • Would I like to buy one of the most reliable cars?
  • Will I normally be driving short distances or longer journeys?
  • Do I want my car to be environmentally-friendly and economical?
  • Do I want one of the safest cars on the road?
  • Do I need to be sure the car will fit in my garage?
  • What length of warranty am I looking for?
  • Does my car need to be able to tow a caravan?

Comparing cars

To help you decide which car would be right for you, the following websites publish regular reviews of:

Your next step

Find out about the different ways you can pay for a car