Setting a budget

As well as picking a great new car, working out monthly costs really is the most important thing you can do...

And if you plan to buy using new car finance or a bank loan, it will also help you work out how much money you will need to make repayments on time.

Don't forget that this figure is just a starting point: you should include your expected outlay on fuel, servicing, insurance and road tax to work out how much you will need to keep yourself on the road.

It's a very good idea to have these figures to hand before you visit a new car showroom, it will help you stay focused on your spend - whatever the showroom staff say!

How much will my car cost per month?
If you are planning to buy a new car, it's a good idea to add up all the monthly payments you’ll have to make to keep yourself on the road.

• Be sure to include your loan or finance payments, as well as the monthly outlay on fuel, road-tax, insurance and servicing.
• Your dealer should be able to help you with the approximate finance cost and likely servicing bills. Online insurance firms will provide you with a no-cost estimate of a year's insurance.
• Fuel costs can be worked out by dividing your expected annual mileage with the car's MPG, and then multiplying that figure by the cost of a gallon of fuel.
• If you can’t get exact figures make sure to over-estimate – that way you won’t find yourself caught out by expensive fuel bills or maintenance costs.
• It's also worth looking at the price of parts. Check that your new car doesn't need expensive or hard to find tyres or other such consumables, such as brake pads and discs.
• How much will it be worth in the future?
• Take a look at predicted re-sale values for the model you’re going to buy and see how much money you’ll be able to make back when you come to sell your car further down the line.

Manufacturers like BMW and Volkswagen always have strong re-sale values but mass-market brands, and cars that sell in very high numbers are more likely to depreciate more quickly.
Avoid wild colour schemes, or spending big on non-standard optional extras like heavily tinted windows, exhausts or bodykits - as these will add nothing to the value of your car when you come to sell it, and could even make it worth less.