The AA
  • Used Cars
    Used Cars
    • Browse by Manufacturer
      Browse by Manufacturer
      • Used Audi
      • Used BMW
      • Used Citroen
      • Used Fiat
      • Used Ford
      • Used Honda
      • Used Hyundai
      • Used Jaguar
      • Used Kia
      • Used Land Rover
      • Used MINI
      • Used Mercedes
      • Used Nissan
      • Used Peugeot
      • Used Renault
      • Used Skoda
      • Used Toyota
      • Used Vauxhall
      • Used Volkswagen
      • Used Volvo
      • Search All Used Cars
    • Browse by Model
      Browse by Model
      • Used Audi A1
      • Used Audi A3
      • Used Fiat 500
      • Used Ford Fiesta
      • Used Ford Focus
      • Used Ford Kuga
      • Used Kia Sportage
      • Used Mercedes A Class
      • Used Mercedes C Class
      • Used MINI Hatch
      • Used Nissan Juke
      • Used Nissan Qashqai
      • Used Peugeot 208
      • Used Range Rover Evoque
      • Used Toyota Yaris
      • Used Vauxhall Astra
      • Used Vauxhall Corsa
      • Used Vauxhall Mokka
      • Used Volkswagen Golf
      • Used Volkswagen Polo
      • Search All Used Cars
    • Browse by Location
      Browse by Location
      • Used Cars in Birmingham
      • Used Cars in Brighton
      • Used Cars in Bristol
      • Used Cars in Cardiff
      • Used Cars in Coventry
      • Used Cars in Edinburgh
      • Used Cars in Glasgow
      • Used Cars in Leeds
      • Used Cars in Leicester
      • Used Cars in Liverpool
      • Used Cars in London
      • Used Cars in Manchester
      • Used Cars in Northampton
      • Used Cars in Northern Ireland
      • Used Cars in Norwich
      • Used Cars in Nottingham
      • Used Cars in Scotland
      • Used Cars in Sheffield
      • Used Cars in Southampton
      • Used Cars in Stoke-on-Trent
      • All Locations
    • Browse by Bodystyle
      Browse by Bodystyle
      • Used 7 Seaters
      • Used 4x4
      • Used SUVs
      • Used Executive Cars
      • Used Family Cars
      • Used Luxury Cars
      • Used People Carriers
      • Used Sports Cars
      • Used Supercars
      • Used Superminis
      • Used City Cars
      • Used Hatchbacks
      • Used Estates
      • Used Saloons
      • Used Coupes
      • Used Convertibles
      • Used Motorhomes
    • Browse by Fuel Type
      Browse by Fuel Type
      • Used Diesel Cars
      • Used Electric Cars
      • Used Hybrid Cars
      • Used Petrol Cars
    • Browse by Transmission
      Browse by Transmission
      • Used Automatic Cars
      • Used Manual Cars
    • Browse by Maximum Price
      Browse by Maximum Price
      • Used Cars under £30,000
      • Used Cars under £20,000
      • Used Cars under £15,000
      • Used Cars under £10,000
      • Used Cars under £5,000
      • Used Cars under £4,000
      • Used Cars under £3,000
      • Used Cars under £2,000
      • Used Cars under £1,000
    • Buying Advice
      Buying Advice
      • Best used 4x4 cars
      • Best used 7-seater cars
      • Best used electric cars
      • Best used estate cars
      • Best used family cars
      • Best used first cars
      • Best used fuel efficient cars
      • Best used hybrid cars
      • Best used second-hand cars
      • Best used small cars
      • Best used sports cars
      • Best used SUV cars
  • Used Vans
  • Finance
    Finance
    • Car finance
    • Eligibility checker
    • Car finance calculator
    • Car finance explained
    • Car Leasing
    • PCP car finance
  • Warranty
    Warranty
    • Car warranty
    • Our warranties
    • FAQs
    • Contact us
  • Sell my car
    Sell my car
    • Sell my car
    • Sell my van
    • Value my car
  • Dealerships
  • Your account
  1. AA Cars
  2. Advice Articles
  3. Guides
  4. Can I afford to buy a car?

Can I afford to buy a car?

banner

For many, a car is a necessity. Whether it’s used for commuting, going to the shops or simply getting around, lots don’t have the option of public transport and rely on their vehicles to go from A to B.

Whether you currently own a car and are looking to change, or are looking to purchase a vehicle for the first time, it’s important to ask yourself when you can afford to buy the car. Here is our guide with the key things to consider and ask yourself before agreeing to a deal.

Cash or finance?

The first thing to consider when looking at if you can afford to buy a car is looking at how you will pay. You also need to decide whether you’re going to buy it with cash or finance.

With the former, you will own the car outright and won’t need to worry about any further repayments, however it does require you to spend a significant amount of money, and have it available straight away.

The majority of new and used cars are now bought on finance, as this is a great way of spreading the cost over several months and years, and doesn’t require such a significant payment to be made in one go. Read more about the pros and cons of different types of finance here.

Set yourself a strict budget

Whether you’re buying a car outright or with finance, it’s important to be strict about your budget. Have a think about your finances, working out how much ‘free’ money you have available if you’re buying outright, whether that be £5,000 or £15,000. The more you put forward now, the less the monthly payments will be.

If financing, it’s worth thinking about how much available income you have in your monthly pay cheque. It’s worth putting a plan in place for how you could keep paying for the car if your financial circumstances were to change. If you can’t keep paying for your financed car, there’s a risk of repossession if an arrangement can’t be made.

Running costs

While it’s easy to think about the affordability of buying the car in the first place, many people overlook the equally-important running costs of the car. This is something hugely important to check. You might be able to afford to buy a 20-year-old luxury car, for example, but keeping it on the road is an entirely different matter.

If you’re a younger driver or looking to keep your insurance premiums down, you should look out for a smaller vehicle that sits in a lower insurance group. Before buying any used car, you should get insurance quotes to make sure you will be able to afford it.

After this, have a look at the car’s fuel economy. The higher the number, the better, though claimed figures are not always that accurate. If test-driving a vehicle, reset the trip computer to see what kind of fuel economy you might be able to achieve. After this, look at what the annual tax rate will be.

Before April 2017, car tax was based on CO2 emissions, with some lower-polluting models even qualifying for free car tax. After this, all cars (with the exceptions of EV, which remain free to tax until 2025) cost a standardised £180 in annual tax. If the vehicle had a list price of more than £40,000, however, it will cost an additional £390 in annual ‘luxury car tax’ after the first registration until the car is six years old. EVs are also exempt from this.

After this, it’s worth thinking on a more practical level about maintenance costs. Remember to look online to see what an annual service will cost, while thinking about what replacing the tyres will cost you. As a general rule, the larger the wheel size, the more expensive the tyres will be.

Get your calculator out to work out what these additional running costs will set you back, ideally splitting it into monthly payments to see if you can afford these expenses.

Connect with us

Facebook Twitter YouTube LinkedIn
For customers
  • Customer terms & conditions
  • Our dealers
  • Motoring advice
  • Electric cars
  • New cars
  • Car delivery
  • Why AA Cars
  • Customer data request form
For dealers
  • Car dealer terms & conditions
  • AA Cars Standards code (trade)
  • Advertise with us
Other
  • Contact us
  • About us
  • Privacy notice
  • Cookie policy
  • Sitemap
Vehicle Inspections

The AA recommends an AA Cars Vehicle Inspection before purchase. Not all cars are mechanically checked by the AA.

  • Vehicle Inspection
  • theAA.com
© AA Cars 2023  | Company No. 4546950  |  VAT No. 806075443