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Is now the best time to invest in a new car?

As announced in George Osborne’s annual budget, the fuel duty in the UK has risen as promised in April. Combined with the almost exponential rise in fuel prices, the hike will affect the cost of driving for everyone.

Fuel prices have been raised even further, with an increase in all fuel duties by three pence per litre which came into effect at the start of autumn.

The above inflation rises will only return if the price of oil falls below £45 on a sustained basis, and it doesn’t look like this will happen any time soon.

This is bad news especially for motorists who have to carefully budget fuel, insurance and maintenance costs to run a car that is an integral part of their work and lifestyle.

Many will get to the point where just cutting down the length of journeys and overall use just isn’t enough or simply isn’t possible. It’s during this time when buying a new car might actually be a wiser decision than sticking with your old model, as a smaller model will inevitably cost less to run in fuel and insurance costs will be lower.

Insurance is set to rise for all motorists just before the start of next year, rising especially high for motorists under the age of 25. These costs should be taken into account when considering buying a new car. Buying a model with a good track record of efficiency, in both fuel economy and maintenance, will drive down the insurance costs. However, research is key when calculating this, so use as many online and offline resources as you can to find a car that truly suits your needs.

Getting a more fuel efficient car or finding other ways to curb your fuel bill should be a high priority; even if fuel duty does change it doesn’t hurt to find a vehicle that won’t empty your wallet whenever you have to fill up. You’re making a long-term investment, so don’t be afraid to push for features that you think you will still need after five years of use.

Shopping around for other cost-cutting methods such as installing extra security features (to lower the cost of insurance) or changing your driving routes is also to be encouraged.

However, cars are an investment that only a lucky few can immediately fund with private savings, and the unlucky may find themselves in a circle of spiralling costs trying to maintain a substandard car because they can’t afford the money or the time to buy another.

Unsecured loans are a good way to get the exact amount needed to buy a new car quickly. The loan will allow you to get on the road as soon as you have bought your vehicle, so you can avoid disruptions to your daily commute being with a broken-down car or get round to selling your old model.

You can pay off the loan in regular instalments by setting aside the money you’ve saved on running costs. After a few years you will have broken even on your purchase and maybe even saved more money in the long term.