What car can I afford? Setting a budget for your new car

4x4 or family car? Three-door or five-door? Red or silver?...

There are lots of questions you need to consider when it comes to buying a new car, but your budget is by far the most important. Rush in without taking account of what you can actually afford and you’ll pay for it later – literally!

That’s why we strongly recommend that you take the time to get a realistic budget in place before you even start looking at the specifics of what your next car will look like (and why we offer you plenty of useful tools to help you get this sorted).

Here are the 5 steps you should take to make sure you choose a car that’s affordable.

1. Take a look at your personal finances and monthly outgoings

Your first port of call should be to review your finances and decide whether you can pay for your car outright, or whether you’ll probably need to look into other finance options.

If you’re going to be paying for your car on a monthly basis, you need to look at how this will fit in with your incomings and outgoings, and also have a think about how long you want to be paying for.

2. Consider running costs

You also need to take careful account of the main expenses that come with running a car: insurance, fuel, road tax and servicing. These will, of course, differ from car to car, so start looking at the makes and models that interest you to compare and contrast – browse our selection of cars online and you’ll notice that the information you need about fuel economy, insurance group and road tax costs is listed right there for ultimate ease.

3. Can you part exchange?

By part exchanging, you could reduce the cost of your new car considerably, even if there’s outstanding finance owing. Find out what your current car is worth by giving us a few details on our part-exchange page – you might be pleasantly surprised by how much we offer.

If you’re buying your car outright, then you’re now good to go; however, if you plan on taking out finance, there are just two more steps to go through.

What's My Car Worth? Get a valuation now

4. Need finance? Then gather together your deposit…

If you’re part exchanging, then your deposit might be pretty much sorted; if not, you’ll need to take a careful look at your savings and see how much you’re willing to lay down upfront.

Read more: How Much Can I Put On Finance?

5. … and get calculating!

You now need to bring these figures together to get an overview of your budget. Sounds complicated, right? Don’t worry – we can do some of the math for you: just input your deposit amount, part-ex value (if any), monthly budget, repayment time, and indication of you credit rating into our car finance calculator  to see a full breakdown of what you could afford based around a hire purchase agreement and PCP agreement

And don’t worry if the results aren’t quite what you were after: we offer our customers a choice of several other finance packages besides hire purchase – many offering a lower monthly payment rate – so there’s sure to be one to suit their needs. Just talk to one of our team.

What car should I buy?

Our search tool can help you find your ideal car for your budget if you're thinking of buying one on finance. See below to get an idea of what kind of cars you'll be able to find on your budget...

Up to £100 - Peugeot 108, Ford Ka, Seat Mii, Fiat Panda, Volkswagen Polo, Honda Civic, Vauxhall Insignia, Vauxhall Corsa, Volkswagen Polo.

Up to £200 - Vauxhall Zafira, Nissan Juke, Alfa Romeo Mito, Ford Focus, Ford Fiesta, Mini Cooper, Hyundai i30, Seat Ibiza, Peugeot 208, Fiat 500, Vauxhall Astra, Skoda Superb, BMW 3 Series, Volkswagen Golf, Ford Kuga.

Up to £300 - Vauxhall Mokka, Seat Leon, Nissan Qashqai, Volvo V40, Mazda 6, Skoda Octavia, Kia Cee'd, Volkswagen Scirocco, Peugeot 308, Audi A3, BMW 1 Series, Jeep Renegade.