Any car driving on UK roads needs to have three things;
- Firstly it needs to be roadworthy (which means passing an MOT – Ministry of Transport Test – if the car is older than 3 years)
- Secondly, it needs to have road tax (which pays for the roads and maintenance needed like potholes etc)
- Lastly, the car needs to be insured at least to the level of 3rd party coverage (which means if you hit somebody else’s car it will pay for the repair of their car but not your own – this is typically the cheapest cover)
So when you’re choosing a car you need to think about a million different things.. as well as how loud the stereo is of course and what colour the seats are…
1. Road Tax
Vehicles made after the year 2001 are banded into, essentially, how good or bad your car is for the environment… basically the smaller and less pollution your car produces the less it will cost annually to tax.
The lowest band is for electric vehicles that are zero-rated, but in the highest band road tax can climb up to around £500 per year for a supercar or a gas-guzzling 4×4. But if you’re buying a supercar you probably have the cash to spare.
The average tax bill for a small 1000cc hatchback (normal starter car) is approximately £130 per year, although it could be less if it’s a newer more fuel-efficient engine.
It’s always worth asking when you’re searching for a car because it’s a year-on-year charge and it’s also a good indicator of how fuel-efficient the car is. It’s a good idea to check with the dealer or on the government website as it often changes.
This is probably the single biggest cost in the early years when you’re inexperienced as a driver.
Unfortunately, statistics show that new drivers are 50% more likely to have an accident in the first two years of driving, and insurers know this so their prices reflect it.
Prices stay high for first-time drivers until they can prove they are safe, secure and experienced drivers.
The engine size will affect the insurance group the car falls into. 1L (liter engine) is a small starter car, 2L is typically a small family car or a slightly more powerful small car, 3L is a saloon or small sports car, 4L is a very fast car, a small truck or 4×4. 5L and above is likely to be a sports car, supercar or racing car.
The lowest insurance group is 1 and this covers the majority of typical smaller 1L cars (Corsa, Clio etc), for this group aim for 1000cc. Whilst the size of the engine is the largest determination of the insurance group, because bigger is generally faster, it’s also important to note insurers take into consideration repair costs – a BMW is going to cost more to repair than a Vauxhall.
When you first begin driving, to minimize your insurance costs you should be looking at group 1 & 2 cars, most manufactures have low-end/starter models that fit the category.
If you’re really keen on slim-lining the cost of driving you can opt to have a black box fitted or monitored on the car, this can reduce the insurance costs by up to 50%. It’s worth checking which insurers offer this option, not all will.