Budget Cars: What to buy?

by Tom McBeth

With towns and cities spread out and public transport rarely frequent enough to provide a quality service, owning transport to get around on your own terms and to your own schedule is the only realistic way to live independently.

Driving of course comes with its own pitfalls. With every year, month and day, trends and costs change, and rarely for the better. At the time of writing this post, the price of fuel is coming down, however the cost of tax, insurance and the vehicles themselves rarely change for the better. Learning to drive is also an extremely costly and time consuming process – it took me around six months of lessons, and paying theory and practical test fees, I spent in the region of £800 learning to drive, only to then be billed with an extortionate insurance cost for my first year (even at the age of 25). If you’re under the age of 25, you can expect the cost of insuring your first car to be a four figure sum, and probably more than the value of the car you’re driving.

So what makes us want to drive? I conducted a survey among fellow students and work colleagues who rely on transport and commuting on a day-to-day basis to get some answers. In terms of why people drive, there’s frequent use of the words “freedom” and “independence”, suggesting that it’s more than a necessity that encourages people to invest in their own transport.

Car considerations

The survey showed that the cost, unsurprisingly, came out as the main consideration when buying a new car, split between the outright cost to buy the vehicle, but more so the running costs of how economical it is, tax, insurance group and maintaining it. These are all elements that small car manufacturers factor in as part of their quest to build new, small and user, as well as planet friendly cars, but when going from a bus or train fare costing a few pounds each week, to a car costing in the thousands to buy, and hundreds a year to run, it’s a big step to take.

To help consumers make their decisions, Auto Express magazine have just produced a series of articles on how economical cars are and also those that are cheap to insure. The economy article targets higher specification and more modern cars and I suspect are aimed at those with more income to invest in their vehicles outright, but makes for interesting reading and also show the same manufacturers names come up time and time again.

It’s also worth noting that the extras on vehicles are all well and good, but if you’re buying used remember that the service provided by the garage may not cover them. I learnt the hard way that recharging the air conditioning unit isn’t covered by a full service, and will set you back at least £30 extra, so it’s well worth checking this before leaving the forecourt.

Perhaps something that doesn’t immediately come to mind to first-time car buyers is the feel for driving a car. If you’ve learnt in a Fiesta, you might want to start out in a Fiesta! This isn’t a bad way to go, as instructors cars are almost certainly reliable and economical.

Petrol vs diesel vs alternative fuels

You may also need to weigh up whether to get a petrol or a diesel car. Fuel costs fluctuate all the time, and at the time of writing this the cost in towns along the A1 (Grantham and Peterborough) are roughly 115 for petrol and 120 for diesel. Advice varies on what you need to consider and how many miles you need to be doing to make diesel pay off, but essentially I would suggest if you’re likely to be sat in traffic in a town or city centre most days, and/or if you’re not doing more than 40 miles a day, five days a week, you will be better off with a petrol car. Here’s a handy website for those wanting to keep an eye on the price of fuel across the country!

Another quick tip! Most, if not all, learner cars are diesels. This is mostly due to fuel economy when they do so many miles, but also because they are easier to drive and have a sturdier and easier clutch. If you choose a petrol car, and find yourself on a hill of any gradient, you will likely find that sitting on the biting point of the clutch will no longer have the power to crawl up the hill, and instead you’ll roll backwards or stall. Solution? Learn to rev it to a few thousand rpm before/as you find the bite. It’s actually a bit of a skill and takes some getting used to, but this was something my instructor, I’m sure among others, failed to really address in the process of learning in a diesel.

The wildcard in buying a car that will become more realistic in the future is the electric of hybrid option. Unfortunately, as this map shows, charging points in rural areas like Lincolnshire, Norfolk and Yorkshire are few and far between, as well as between the main cities and towns all across the country. Twin this with the fact that electric and hybrid cars are expensive to build and have, comparatively, been around for a short amount of time, used versions of the cars haven’t depreciated in value to anything like the same extent as a petrol or diesel car of the same size and age. Just to clarify though, being out in the sticks in Lincolnshire, I can’t say anything first or even second hand, for driving these or how they compare on the road to a standard fossil fuel car.

New vs used

The cost of a new car can look terrifying at a glance. You’re not likely to see anything for less than £6,000, which may get you a base model Chevrolet Matiz or Dacia Sandero for example, and more popular cars such as the Ford Fiesta and Renault Clio will easily set you back over £10,000. Modern 0% finance schemes from licensed garages do make these affordable on a month-to-month basis and there are certainly other benefits to buying new. First and foremost, you will be getting the most up-to-date model of the car you choose, along with a (usually 5 to 7 year) warranty which should give you piece of mind again the horror stories you may hear about buying used cars. Unfortunately you also have to consider the drawbacks. Aside from the outright cost, you will see massive depreciation on the value of the car almost immediately. This is something that will already have happened to a used car, and whilst you would wear away at the value of an old car as you use it, you won’t see nearly the same damage to your investment. You also have more flexibility in negotiating the cost of used cars, and far greater options in terms of models, ages and extras such as air conditioning and sat-navs, which won’t cost a fortune to get as part of the package.

It’s always worth having a good shop around for used cars to see what’s available, and talking to friends and families to get an idea of which used car garages are reputable and offer a good after-sale service.

The cars you want

So what cars are there available to the younger driver who can’t quite afford his dream car yet? Well the small car and hot hatchback are usually the way forward. Anything with an engine under 1.4 litre petrol, or 1.6 litre diesel, will be comparatively insurable, although the smaller the better in that respect.

Feedback from our survey showed that the most popular cars in this bracket are the Ford Fiesta, Mini Cooper, Volkswagen Polo and Fiat 500 (above).

Depending on circumstances, for example if you have children, you may need to look further up the chain of cars at coupes, saloon or people carriers. These are cheap used cars due to the numbers available and are often well used, but are heavier, thirstier cars and will cost more to run and insure.

Then there’s the dream cars. The cars we all want but probably wouldn’t be offered insurance on at any cost. That said, shout outs for the Volkswagen Beetle and eco-friendly Nissan Leaf, aren’t out of reach of most car buyers. Then again, the Ferrari 458, Land Rovers and Aston Martin DB7 may be a step or two above these.

The icing on the cake though, surely, the classic Ford Capri. A car that, if you can find one, will likely cost more to maintain than insure (and that’s saying something). Also, the American Pontiac Firebird and the Delorean DMC-12 (above) made famous in the Back to the Future films. The 1980s, stainless steel, gullwing doored, left-hand drive only car may be one for the die-hard fans with £50,000 spare, over the drivers.

Back to reality…

So what is the best realistic option for the new drivers? Used, you can’t beat the Ford Fiesta (below) as a first car. The best-selling car in the UK, as stated by Autocar’s review, makes it widely available in all different specifications, conditions and are cheap to run, insure and maintain. It’s also a car commonly used among instructors for the same reasons. If you want something at least a little different though, the same can be said for the Peugeot 106-108 series’.

New cars are much more budget-dependent, but currently Kia is offering great deals with long warranties and affordable finance deals. Same can be said for Chevrolet with their Spark models.

Whatever the car you have in mind, it’s well worth taking a look at Autocar’s reviews to see what they say from a unbiased, hands-on point of view.

So there isn’t a clear cut answer, and it’s hard to narrow down what’s out there before accounting for personal taste as they’re all so similar in economy, affordability and availability.

November 2014

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