Getting on the road

I remember many years ago when I was in Year 12. A friend of mine, Tom, walked in the common room having just parked up at school. All I could do is sit there in envy as I wasn’t even 17.

Despite the fact Tom only lived a ten-minute walk away, the sense of freedom of driving to school was exciting. This brings me on to what will realistically be your first committed outgoing before you even leave school.

Swapping your Provisional Licence for a Full Licence

Before you step foot in a driver’s seat on your own, you must pass your driving test.

Driving Lessons are either one or two hour sessions, with each hour costing roughly £25 to £30. The average driver in the UK is expected to have 47 lessons, a grand total of £1,175.

You will also need to take a theory test at a cost of £32 and a practical assessment at £62, assuming you pass first time.

Insurance – which one do you need?

The biggest concern for most new drivers is the cost of insurance. Different cars will have different monthly premiums, so it is important to research before you purchase. There are two main types of insurance:

  • Fully comprehensive – this cover will insure you, your vehicle and any third party where property has been damaged or people have been injured in a collision
  • Third Party Fire & Theft (TPFT) – Your vehicle is only covered in the event of a fire or theft, but damage is not covered. You are insuring against damage and injury to a third party.

It is important you get the most suitable insurance for yourself, especially as policies all have different terms and conditions.

It is also very important to note that being a named driver on a parent’s policy is illegal if you will be the main driver of the vehicle.

Cars are attained in various ways; handed down, loan off a parent, a present (lucky you), or even car sharing with a sibling/parent. Methods are generally a bit restrictive for under 18s as you cannot commit to a credit agreement, but once you are over 18, more options are available.

Ongoing affordability is the most important consideration when committing yourself to a credit agreement. As much as you may want a nice new car, are the monthly repayments going to be an issue when you’re at university? Unlike a student loan, you’re committing to paying back the money irrespective of your situation, so it is important to use this as a last resort.

If you are considering a second-hand car (let’s face it most new drivers do), make sure to take someone with experience along with you. You will not know some of the issues to look for as a new driver and the last thing you would want to do is buy a car that is unreliable.

So, you’ve spent a small fortune on lessons, you’ve bought your first car, but the spending doesn’t stop there – you need to pay to use it now!

Day to Day Running

The costs of running a car can be weekly, monthly or annually depending on what it is, with many of them being a legal requirement (highlighted in red). Please see the below, but this is not an exhaustive list:

  • Fuel
  • Tax – this can be paid monthly, six-monthly or annually
  • Insurance – Can be paid monthly or as an annual payment
  • MOT – if your car is a more than three years old, the vehicle must have a MOT check every year. The maximum cost of an MOT is £54.85
  • Repairs – cars break, you need money to fix them
  • Servicing – keeps your car refreshed and helps prevent future issues. The average cost of a service is £220, but this will vary
  • Cleaning – you want your car to look nice

I hope this give you some food for thought with thinking about your first car, but in the meantime, best of luck with those lessons!

A blog post by Lee Quinn

Lee Quinn is a specialist Financial Planner in the education sector for Wesleyan Financial Services.

Lee believes that financial education is fundamental for everyone and being well informed earlier in life can make things much easier in the future. Lee regularly delivers financial education workshops across the Midlands.

For more on the above and other money subjects, check out the Your Money Matters here.