Owning a car is a goal for many young adults. It helps to solidify independence, especially for those based out in the sticks, and gives you the flexibility to transition smoothly into a career after leaving school or university. However, investing in a car you cannot afford risks your financial wellbeing and could set you back more than it moves you forward. Before you take the plunge and sign on the dotted line, ensure you understand the true cost of driving for young adults.
Unfortunately, young adults tend to face higher insurance premiums. Insurers consider younger drivers at greater risk of accidents due to their lack of experience, meaning they often charge more to ensure they’re covered. When you’re looking at the average cost of insurance, assume that yours could be significantly more – now and in the immediate years after passing your test – and prepare accordingly.
There are ways to help reduce this cost. Consider a special young driver insurance policy which rewards you based on how well you drive. Your insurer will use technology to monitor your driving and assess safety, committing to well-priced renewal offers if the data is positive. Adding an experienced driver to your policy can also reduce premiums but ensure you’re listed as the main driver. If you’re saving up for your own vehicle, look at getting insured on a family member’s car in the meantime to demonstrate safety behind the wheel.
The upfront cost of a car is the biggest expense, whether you’re purchasing new or used. Think beyond the price tag and prioritise actual value to you. A quality used car with several years of life left is often preferable to an old banger at risk of breaking down or ashiny new car that depreciates quickly.
Consider the pros and cons of buying through a dealership or an independent seller. The latter is often more cost-effective, but you risk finding expensive issues down the line if you don’t conduct thorough checks yourself. Always ask for detailed insights into themodel’s history and condition. A reliable owner will have all the necessary documentation, and you can check the car’s current MOT status online.
When choosing your vehicle, bear in mind how the model could influence the essential costs like tax and running expenses like fuel and maintenance charges. This will enable you to accurately assess its long-term affordability. It’s always a balance – for example, hybrid or electric vehicles can reduce fuel and maintenance costs, though they come with their own initial investment.
Speak to friends and relatives to get an idea of how much you can expect to spend on essential costs each year and compare this with your estimates for each model you view to avoid getting saddled with a money-guzzler.
Remember that even standard charges like tax can change, andunpredictably, and always overestimate how much you might need to afford. You shouldn’t commit to a car without first building an emergency fund, so you can confidently cover unexpected expenses without risking going into the red.
Set aside a portion of your monthly income and keep it separate to your long-term savings, in an easily accessible account so you don’t have to scramble should a breakdown or fine occur. Keeping the car in good condition is in your control to an extent and can minimise the chance of issues arising, so ensure you schedule regular services in line with the recommendation – once a year or every 12,000. Proper maintenance will also increase the likelihood of you passing its MOT first time.