How to get a cheap, reliable car on a budget

For the majority of people, a car is a necessity. Whether it’s travelling for work, doing the school run, or simply avoiding the inconvenience of public transport, a car can save you time and give you a lot of freedom. One of the most common questions we get asked is how to get a cheap, reliable car on a budget – and we’re here to answer.

However, what can hold some motorists back from getting their hands on a car is the price. From the initial cost to fuel and repairs, it all adds up.

But being on a budget shouldn’t stop you from owning a car. With a little bit of time and know-how, you can find the right car for you, without it breaking the bank.

Want to get a cheap, reliable car on a budget? Follow our tips for success.

Tip #1: Do your research

A little research can go a really long way when it comes to finding the right car for you.

Unless you already have a car in mind, you should start looking around to see what’s out there.

The Internet is a mine of information and a good first stop. Other good research sources are car magazines, car dealerships, or even asking friends and family.

Questions to ask yourself:

What will I be using the car for – short or longer journeys?
How much space do I need (for family, shopping, prams, even pets)
What are the running costs for the car – tax, insurance, fuel?
Is it important that it’s environmentally friendly/economical?
What length of warranty do I need?

Once you have all that, you should be able to narrow down your search field and find the right car for you.

Tip #2: Work out a realistic budget

Your budget can help you determine what kind of finance you should look at, as well as whether you should consider buying new or used.

It can also help you work out how much you can afford in running costs.

Being realistic about how much you can afford is really important.

Make sure you give yourself some leeway in your budget or you could overstretch yourself.

If that happens, and later down the line your income drops or circumstances change, it could lead to financial problems.

At Hippo, we don’t lecture customers about what they can and can’t afford. But if you have concerns that you might be over or under-budgeting for car finance, then consider doing an affordability exercise.

Look at your income, take an average over a three-month period, then consider all of your must-have payments (like utility bills) and bills you can’t avoid.

Once you subtract one from the other, you’ll be left with an amount that represents your discretionary or disposable income.

Out of this amount, you can decide how much you’d like to use for monthly car finance repayments.

You probably don’t want to use it all, as it’ll leave little room for doing anything else.

It’s a good idea to build in a bit of a buffer when you do your budget too, as seasonal spending (such as during the holiday season in December) can throw out your ability to make payments on time. Calculate how much car finance you can apply for with our handy Car Finance Calculator tool.

Tip #3: Used or new – get value for money

Just because you’re on a budget, doesn’t mean you should completely dismiss buying a new car.

There’s a wealth of finance deals to suit all sorts of circumstances. However, there are also some great used car options out there too.

What you want is value for money.

Value is hard to find if you’re not looking for it, but it’s amazing what you can find when you actively look for a good deal.

Try to find a broker that has a huge array of vehicles – this means that they’re less likely to want to steer you towards a certain vehicle that might suit them but not you.

Here at Hippo, we have thousands of new car lease deals. But we also have the same in nearly-new and used cars, which are available in other forms of finance, such as personal contract purchase (PCP) or hire purchase (HP).

Tip #4: Think smarter

When you’re buying a car on a budget, a degree of tactical thinking can save you hundreds of pounds.

Only buy what you need

Yes, air-con, heated seats, and built-in sat-nav are all really nice to have. But do you need them?

Stick to what’s necessary rather than all the frills, and you can find something affordable for you.

Low mileage isn’t always better

In theory, a car with lower mileage should keep running longer. However, it’s not always the case.

It’s more about how the car has been looked after.

If your low mileage car has seen more of the garage than the open road, it’s not always better than an older vehicle that has been regularly driven and well-maintained.

Look at the bigger picture

If you want to buy a car that’ll give you value for money, don’t immediately pick the cheapest car you can find.

Price may be a deciding factor, but buying a cheap car doesn’t always guarantee that you get a bargain.

Check the car’s records and, if buying privately, feel free to get your own mechanic to check over the car too.

Tip #5 Find an affordable finance deal

There are plenty of finance options out there to suit all sorts of budgets.

If you’re looking at a tighter budget, the key is to find ways of lowering your monthly payments, and there are several ways you can consider doing this.

Get the best APR you can

The Annual Percentage Rate (APR) has a significant impact on your car finance agreement, as the lower your APR, the less you’ll have to pay back, and the lower your monthly payments will be.

The rate you’re offered is usually determined by your credit score, as well as the amount you’re asking to borrow.

Try to get the best APR (Average Percentage Rate) that your credit score qualifies for by using a broker with a good relationship with several lenders.

Many brokers will introduce you to one lender, but here at Hippo Motor Finance, we work with a large panel of lenders, which means that we can help find the lender with the best rate for you.

Length of contract

Your contract length is a second consideration if you’re worried about how much you pay every month.

A longer contract, such as four or five years, brings down your monthly payments. While shorter contracts of two or three years increase your repayments.

While having lower monthly payments may seem convenient in the short term, bear in mind that the longer your contract, the more you’ll pay in total for the vehicle, as you’re paying more interest.

Tip #6 Remember, you can’t put a price on peace of mind

Many people have no problem buying a nearly new or used car on finance. But what stops them is the fear that they might have bad luck and get a bad one.

There is no concern for this at Hippo, as firstly, we buy very carefully.

Secondly, we have a dedicated and experienced service team (body shop and workshop) whose job it is to assess and fix any repairs and make your nearly new or used vehicle almost as good as new.

We also ensure that every car or van that leaves our premises has a warranty in place – either the existing manufacturer’s warranty or a complimentary Hippo warranty.