How to start saving for a car
Saving up for a car in advance can make it easier to afford the type of car or model you want. It can also help you feel more in control of the costs that come with car ownership.
Whether you’ve just passed your driving test or you’ve owned a car before, it's a good idea to make a plan. Setting a clear savings goal can help you stay focused and feel more confident about your decision.
Before you start saving, ask yourself:
- What kind of car do I need or want?
- How much is it likely to cost?
- When would I like to buy it?
Knowing the answers to these questions gives you something to work towards. It’ll also help you plan how much to save and how long it might take.
What to think about when buying a car
Of course, there’s more to buying a car than just the price tag. You’ll then need to think about what will suit your budget and your needs. Here are some other things to consider:
- New or used car
New cars cost more but often come with warranties and need fewer repairs at first. Used or second-hand cars are usually cheaper but may need more maintenance. Do your research, compare different vehicles and choose what works best for your budget.
- Running costs
The cost of owning a car can add up. Make sure to plan for:
- Car insurance
- Fuel (or charging, if you have an electric or hybrid vehicle)
- Road tax
- MOTs and servicing
- Repairs
- Parking
These costs can vary depending on the type of car you choose. For example, car insurance groups can affect how much you’ll pay for cover, so it helps to check that before choosing a car.
- Size and type of car
Think about how you’ll use the car. Smaller cars are cheaper to run, easier to park and often cheaper to insure because they cost less to repair. Larger cars may be better for long trips or carrying passengers, but they can be more expensive to insure as they may cause more damage in an accident and cost more to fix. Meanwhile, electric and hybrid cars can save money on fuel and have a lower carbon footprint but might cost more to buy upfront.
- Safety and reliability
Look at safety ratings and online reviews to help find a car that’s known to be reliable. If you’re buying a used car, look at how many miles it’s done and whether it has a full service history.
- Buying from a dealer or private seller
Dealers may offer warranties or a return policy. Private sellers can be cheaper, but you might not have as much protection if something goes wrong. Always check the car’s paperwork carefully, including the logbook, MOT and service records.
- Leasing a car
Leasing a car, rather than buying one, can be more affordable in the short term. You'll usually pay lower upfront costs and a fixed monthly fee, which could make it easier to budget. But you’ll need to make sure the monthly payments fit your finances, as missing one could affect your credit score. You won’t own the car and there could be extra charges like going over milage or wear and tear. You’ll also need comprehensive insurance, which can be more expensive and you won't get any money back at the end.
