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Tips on reducing the cost of buying and running a car

Being able to buy and run a car on a budget is probably more important than ever before for most people today.

So we’ve put together our top tips for buying and running a car on a budget.

Plan your budget

Your budget will have the most influence over what car you can feasibly buy. Don’t try and overstretch what you can afford to spend, as this can lead to long-term problems. This is especially true if your finances are prone to change, because if you have less cash coming in than before you may not be able to afford running costs or financing costs.

Do your research

When it comes to finding a car, look for models that are known for their reliability, hold their value well, and have a good safety rating. The best places to find this information are websites with  car advertising such as WhatCar?, CarBuyer and Honest John, which provide in-depth reviews that can help to inform your decision. You should also look out for cars that are known for being cheap to run – insurance, road tax, and petrol can quickly add up, so choosing a model that is both economical and qualifies for low tax and insurance rates can keep costs down.

Don’t be afraid to go used

If you don’t have the budget for a new car, used cars can sometimes offer just as much reliability for a cheaper price, provided you choose correctly. Like fine wines, some cars age very well and you can often find models that run like new for a fraction of their original price.

Explore your finance options

There are a number of options open to you when it comes to financing your car. Obviously you can pay up front if you have the budget for it – particularly useful if you are looking to buy a super-cheap used car from a private seller.

Unfortunately, it is often not as simple as that and you may find yourself considering the finance options for your car. The process of getting your car finance has two stages: deciding on what kind of financing you want, then finding the provider whose deal suits you best.

There are five main types of car finance:

  • Personal loan – taking out a personal loan involves independently organising a loan with a bank or building society to finance the purchase of your car. You can often shop around for the best deal — look at the annual percentage rate (APR) to compare them. The downside to personal loans is that if you default, the moneylender can seize any of your assets and not just the car.
  • Hire purchase – using this method to finance your car will require you to pay a deposit up-front and monthly repayments until the car is paid for. Until then, the car belongs to the hire purchase company and you can’t sell it. There may also be an additional fee payable if you choose to buy the car at the end of your repayments.
  • Personal contract purchase – this finance option is very similar to hire purchasing, however you get more options when you reach the end of your repayments. You can choose to keep the car, return the car, or trade the car for a replacement.
  • Personal contract hire – this is also known as personal leasing. Essentially, you are renting the car for a set number of years with a pre-agreed mileage limit for each year (usually 10,000 miles). There is no option at the end of the deal to keep the car.
  • Dealer finance – these packages differ from dealer to dealer, but they can often be weighed heavily in their favour at first, so check  promotional  banners and don’t be afraid to haggle. Going in armed with knowledge of similar financing and manufacturer offers can help you to get the best deal possible for your car.

You can find more detailed information and the pros and cons of each kind of financing option in this guide from sites such as the Money Advice Service and Which?. Remember that while getting a good deal on a car’s price is good, you need to be careful not cripple yourself with a poorly thought out financing scheme.

Run your car cheaply

Once you have found the car that you want and have settled on a sensible financing option, you can begin to use your car. Just because you’ve finally found your freedom doesn’t mean you should stop looking for ways to save money.

There are a few ways that you can keep the running costs of your car down so that you can keep more cash in your pocket:

The cost of petrol and diesel is one of the the biggest concerns for motorists, so why not make your fuel go further?

With the average family car costing around £90 to fill up, we have come up with a set of tips to make motoring more economical.

top tips:

  • Lowest speed, highest gear – the secret to achieving a high mpg figure is driving at the lowest speed you can, in the highest possible gear. This optimum fuel economy speed will be different for every car.  While there is an ideal speed, road conditions and gradients don’t often allow you to do that speed so you have to improvise and learn to adjust your driving according to the road ahead. Also, if you were to maintain one speed, either manually or by using cruise control, you would never achieve maximum fuel economy
  • Maintain momentum – keeping the car moving is key to fuel economy. Obviously this depends on traffic conditions and what’s happening on the road ahead, but slowing down and having to accelerate again naturally uses more fuel
  • Gentle right foot – having a light right foot and ensuring all acceleration is gentle is definitely important, but fuel-efficient driving is all about not upsetting the equilibrium of the car
  •             Lighten the load – don’t keep unnecessary items in your boot as they add weight to your vehicle, which affects fuel economy. On average, every 50kg will increase your fuel consumption by 2%. This is based on the percentage of extra weight relative to the vehicle’s weight so it affects smaller vehicles more than larger ones
  • Don’t get dragged down – don’t leave your roof bars on because they create wind resistance and cause your car to use more fuel through the ‘drag’ effect. Roof bars tend to weigh between 3kg to 5kg but the aerodynamic factor is greater. An empty roof rack affects fuel consumption by about 10%
  • Keep the pressure up – make sure your tyres are inflated to the correct pressure as indicated in your owner’s manual. This will vary depending on the load you are carrying: if you have four passengers and luggage then you will need your tyres inflated to the maximum recommended pressures
  • Warm engine – consider making one round trip rather than several short trips. Once the engine is warm it will operate at its most efficient, whereas several cold starts will increase fuel consumption even though the total mileage could be the same. This is why the Record Road Trip team kept going almost continuously, only stopping for 20 minutes at a time
  • Might have to lose your cool – don’t use your air conditioning unless you really have to as it uses engine power and therefore increases fuel consumption
  • Don’t forget the basics – make sure you maintain your vehicle as regular maintenance and servicing improves efficiency, and can therefore improve your fuel consumption.  And why not learn about car maintenance and practise it – being able to carry out your own minor repairs can save you a great deal of money in garage fees. Read a few books or take a car maintenance course to improve your skills.
  • Avoid premium fuels for your standard car – there are quite a few petrol stations that sell ‘high-performance’ fuel that costs a bit more than standard petrol. Your cheap runaround doesn’t need anything like that, so stick to the cheaper stuff.
  • Young driver insurance deals – if you are a young driver, insurance can often be overpriced. There are many specialist deals available on the market that allow you to save money with certain conditions, such as having a black box installed to track your driving habits. Sites such as Money Saving Expert have great guides to finding the best deals on your insurance.

By following these tips, you will be able to buy and run a car for a fraction of what is would cost without putting in a bit of research. Practise what you’ve learned and you could save a lot of cash in the future.

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