How Much Should You Spend on a First Car?
There's no single right number, but a 2026 survey of UK young drivers put the average first car at £4,867. That's a genuinely useful anchor: set it, and the monthly running cost, together, rather than the purchase price alone.
The purchase budget and the monthly running cost are two separate decisions, and treating them as one is where most first-car budgets go wrong.
A car that’s cheap to buy but expensive to insure and run can end up costing more overall than a slightly pricier car that’s cheap to keep. Set both budgets before you start looking, not after you’ve found a car you like.
The detail
A 2026 Monzo survey of UK drivers aged 17 to 21 put the average first car at £4,867. The lowest regional average in that survey was £3,792, in the East of England, if you want a sense of how far a modest budget can genuinely go.
Cars currently listed for sale in the lower insurance groups (1 to 15) skew a fair bit higher than that survey average, typically £3,800 to £17,000, with the bulk nearer £8,000 to £10,000. That’s not a contradiction: the Monzo figure is what young drivers reported actually paying, across every condition and source, while this range reflects what’s currently for sale online in low insurance groups specifically, which tends to under-represent the cheapest, often privately-sold end of the market. Both are real; they’re measuring slightly different things. If your budget is closer to the Monzo average than to this listings range, that’s not unusual, it just means looking harder at private sales and older stock (see dealer or private sale for a first car?).
The purchase price is only half the decision, though. See how much a first car costs per month for the full running-cost picture, insurance, fuel, tax and servicing, which repeats every month for as long as you own the car. A useful way to set both budgets together:
- Decide the monthly total you can sustain first. Insurance, fuel, tax and servicing combined, not just fuel.
- Work backwards to a purchase price that leaves room in that monthly budget, rather than spending everything upfront and hoping the running costs fit.
- Check the insurance group before you shortlist, not after. It’s the single biggest lever on the monthly number (see does the car you buy affect insurance?).
What this means for your first car
A lower purchase price doesn’t automatically mean a lower total cost. A cheap car in a high insurance group can cost more per month, all in, than a pricier car in a low group. The two budgets, what you pay upfront and what you pay every month, need to be set together.
First Car Scout filters by purchase budget and shows the full monthly total for every match, so you can see where your money is actually going before you commit to a car.