It’s worth sitting down and working out what you can afford and how you’ll pay for the vehicle. You’ll also need enough money to cover things like tax, insurance, fuel, and repairs.
Explore: How to create a budget
There are many ways you can buy a used car. The option you take will depend on your financial situation. You may want to consider:
If you don’t need your car straight away, you may want to build up some savings. Even saving some of the money can help reduce how much you need to borrow.
Different car financing options include:
If you want to apply for finance, consider the costs involved and whether you can afford the repayments.
Please note – HSBC doesn’t offer HP, PCP, or leasing agreements.
Financing a used car allows you to spread the cost across a manageable payment period. And with many car owners updating their vehicles every 2 to 3 years after buying brand new, there are plenty of used cars available in great condition.
So, if you can’t afford to buy the vehicle upfront, it’s something worth considering.
If cost is a key factor in your decision-making process, going for a used car can be a smart choice. According to MoneyHelper, brand new ones tend to go down in value quicker (around 15% to 35% in the first year) than used cars.
Your monthly payments are also likely to be lower for used vehicles.
However, before you decide whether car finance is for you, you should consider:
You need to be able to afford the repayments alongside other costs of owning a second-hand vehicle.
This is a tricky one to answer.
In general, the newer the car, the better its safety and security, which can lower the cost of your car insurance. But at the same time, it may cost an insurance provider more to replace a new car than an old one. New cars can also be more attractive to thieves, which could increase the price of your insurance.
Used cars are usually cheaper to insure than brand new ones as they tend to be lower in value – and cost an insurer less to replace. However, this isn’t always the case.
How much you pay for insurance depends on other factors too. Your driving history, where you live, and how much cover you take out will all affect how much you pay.
You should compare different quotes to help you choose suitable insurance. Moneyhelper have a useful guide on what a good car insurance policy looks like.
HSBC doesn’t offer car insurance right now but M&S Bank, a member of the HSBC Group, does. Terms and conditions apply.
M&S Car Insurance is arranged and administered by BISL Limited using a panel of insurers.
You can buy a used car from various places, including:
If you buy from a used car dealership, the car may come with a warranty. Make sure you read the fine print, so you know what it covers.
There are companies that run car check services, which may be worth investigating to give you more peace of mind. Some check the vehicle (including the engine, bodywork, and tyres), while others check the outstanding finance, write-off status, and more.
Always check the owner of the car has paid off any finance agreement. If they haven't, the finance provider could take the car.
Before you hand over any money:
The GOV.UK website explains everything you need to do when buying a used car, including checks to make sure the vehicle isn’t stolen or unsafe and what documents are required.
For more information, visit: GOV.UK: Buy a vehicle.
