It’s crucial to choose a car which fulfils your needs, but doesn’t leave you out of pocket.

Often the best way to work out if you can afford a car is to think of its cost per month. Once you have found an example of a car you are interested in, add together the following figures:

• Divide the price of the car by the number of months you will be paying for it (if you’re taking out a loan or finance)
• The cost of insurance per month
• The cost of road tax per month
• The cost of your expected fuel usage per month
• The cost of expected maintenance per month (include servicing and replacement tyres)
• The cost of repairs (if expected) per month

If you’re taking out finance, there’s plenty you can do to get lower payments:
• Shop around for personal loans – you could get more money and pay less for it
• Push the dealer hard for a better deal on finance (and try and haggle more money off the car’s price)
• Consider a Personal Contract Purchase (PCP)

The value of your current car could also have a big affect on your budget. Getting a car valuation can tell you how much your old car is worth, whether you’re selling privately or trading-in your car as a part-exchange.

If all this is more than you can afford, search for the same model with a smaller engine, as this will usually reduce tax, fuel, insurance and maintenance costs.

How Auto Trader can help:
• Car valuation
• Understanding car loans and finance

Auto Trader search

Once you have worked out the budget you can afford, search Auto Trader to find the car you’re looking for.

How Auto Trader can help: Auto Trader used car search

Car loans and finance

If you want to increase your budget, Auto Trader’s car loan and finance centre can offer unsecured personal loans from £500 to £15,000 and compares top lenders.

How Auto Trader can help:
• Car Loans and Finance Centre
• Understanding car loans and finance