subject: 5 Points You Need To Keep In Mind To Ensure You Can Afford Your New Car [print this page] It would be fantastic if the initial price was the only cost you had to keep in mind when buying a new car. Unfortunately, this isn't the case and to ensure you can comfortably afford your new car, keep in mind these 5 points.
1. Does it have any outstanding finance? - something that can be discovered when carrying out a HPI check, if you purchase a car that has an outstanding finance agreement on it, the new owner becomes the legal owner of both the car and the finance, meaning that you not only have to pay for the car, but for the monthly finance payments, too.
2. Has it been written off? - again, something which can be found out through a HPI check, if a car has been written off it doesn't necessarily mean that it shouldn't be bought, but you need to look at what type of write off it was (there are four categories - A, B, C and D. The first two are complete write offs and the car shouldn't be on the road and the latter two generally mean the car has been written off because it wasn't economical to repair it).
Furthermore, if a car has been written off, it can affect the cost of your insurance, so it's worthwhile keeping this in mind.
3. How much is its annual service and vehicle tax? - When you see a car that you really like, it can be tempting to purchase it there and then. However, it's important that you look at other regular costs that are associated with it, such as its service and vehicle tax.
Whilst it's easy to think a service is going to cost the same amount of money from car to car, it can in fact differ quite substantially, as certain parts that are replaced during a service can cost a lot more on a car that isn't popular in the UK or that is specialist than on a car that is mass produced for the UK market.
In addition, the cost of vehicle tax can come as a real surprise if you haven't checked out the cost beforehand - from 1 March 2010, for a car that falls into the highest vehicle tax band (band M), the cost is 425 pounds a year.
4. How much will standard repairs cost? - hopefully your car will never have to have any extensive repairs, but there are some things that need changing on an irregular basis, such as tyres.
Whilst you might be able to pay 20 pound for a basic, own-brand tyre on some cars, if you're purchasing them for a high end sports car, tyres can cost over 1,000 pound for a set of 4.
5. What insurance group does it fall into? - having a car in too high of an insurance group is a problem that a lot of younger drivers face, as they often go from having a car they don't actually want but have because insurance is low to buying the car they want without checking it's insurance group first.
For example, a popular first car is a Citroen Saxo, particularly the 1 litre X trim version. Falling into insurance group 3, their car insurance is almost always going to be relatively cheap.
A year later or two later, however, once they have some No Claims Bonuses under their belt and have saved up enough money, they walk into VW dealers and purchase a 1.8 Golf GTI. It looks the part, sounds the part and is definitely a fantastic looking car.
Unfortunately, it is in insurance group 15, meaning the cost of insurance is going to be astronomical for a young and inexperienced driver and to some extent, it's going to be unaffordable.
