How to budget for your first family car

Expecting your first child is an exciting – and nerve wracking – time as you prepare for all the changes that are about to happen to your life. Keeping your newborn safe will be top of your priorities so it’s understandable that buying a new car will be on your list of urgent things to do.

If you’ve currently only got a three-door car or a small hatchback you’re probably thinking about switching to a larger family car with five doors to make getting the Maxi-Cosi child seat in and out easier. And if your car isn’t the most reliable it’s definitely worth updating it ahead of the dash to the maternity ward. Whether you’re on the lookout for your first family car, or are planning to sell or trade in your current runaround for one, we’ve got some tips about how to choose the right one and budget for it. 

How to budget

Research has found that the average family spends £2,137 every year on buying their car, with more spent on fuel (£1,534), insurance (£582), repairs and servicing (£634). When you factor in that raising a child is one of the most expensive things you can do, it can leave money pretty tight.

Work out whether you prefer to budget online or on paper and then log all your current outgoings. Detail everything you spend each month and don’t forget things like house insurance that you might pay in one off sums annually. This will show you how much spare cash you have each month.

Next you need to work out how much you can sell your current car for. Using a Car Valuation Tool will help.

Once you have this information you can calculate the difference between your resale value and the next car you’ve got your eye on. You’ve likely already investigated how much your new pushchair and car seat will cost but don’t forget to factor in how much you’ll need for fuel, insurance, Vehicle Excise Duty (VED), servicing and repairs.

AA Car Finance could help afford your ideal car.

Saving and cost-cutting opportunities

Saving for a car can be difficult at any time but especially when you have a newborn on the way. Once you’ve worked out your budget and set a savings goal, it’s important that you stick to it. A few ways to cut the costs when buying a family car include:

1/ Decide on your priorities. With a baby on the way, it’s unlikely you’ll be going out drinking as much as you did but you might be making up for that with regular takeaways that are eating into your savings. Cooking from scratch can free up money that you can put into your new car pot.

2/ Make saving automatic. Decide the amount you want to put aside each month and arrange for it to go straight from your bank into your savings account on pay day. You’re less likely to fritter it away.

3/ Consider borrowing baby equipment from friends and family members. It’s incredibly tempting to spend a small fortune on cute tiny baby clothes but this can really help you save. Obviously never scrimp on child car seats – these need to be new, unless you’re absolutely sure that the seat is complete, undamaged and hasn’t been involved in an accident, and compatible with the vehicle you’re buying.

You can also make some savings by choosing the right car:

1/ Buy used rather than new. It may seem simple but considering cars depreciate quickly, you could save a lot on a car that’s at least one year old. Bear in mind that older generally means less reliable which in turn could mean unexpected repair bills.

2/ Leasing isn’t the cheapest way of buying a car but it gets you into a brand new car with state-of-the-art safety features and is easy to budget for as long as you stay under the agreed mileage limit. Make sure you can afford the monthly payments, which can be worked out with our car finance calculator.

3/ Choose the fuel type wisely. Diesel is always more economical but diesel emissions control, DPF (Diesel Particulate Filter), isn’t suited to low mileage use. Diesel’s still the ideal choice if you’re a high mileage, mainly motorways kind of driver but with more and more cities considering restrictions or charges on older diesels you’re probably better choosing petrol, hybrid or electric if you’re driving mainly in urban areas. 

4/ Search for low official CO2 emissions as these will mean the annual VED rate is reduced, which can save a couple of hundred pounds each year, if your car was registered between March 2001 and April 2017. For cars first registered after April 2017 the only emissions-based saving is if you buy a zero emission vehicle i.e. pure EV, in which case you save £140/year.

Image courtesy of iStock.

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