Car Choice: Don't blow your budget chasing your dream

Celine Lawrence is a new driver with a big budget to spend on her first car. She is 20, has just passed her driving test in the south of France, but will be moving back to Britain and will buy her car then. The car has to be new, belong to a low insurance bracket, needs automatic transmission, and have air conditioning. All this to be included in a budget of £13,500.

A car for the head

Celine may have a big budget, but all new drivers are expected to pay generously for their initial insurance premiums. Young drivers are more likely to be involved in an insurance claim, so premiums are higher. It is rare that a new driver will pay less than £1,000. Certainly a higher specification vehicle will mean a higher insurance quote. So Celine should not blow all her budget on the car of her dreams. She has mentioned the word "stylish", several times in her initial question. Well that should be the least of her concerns – just getting mobile is the main thing, and the one problem with small, cheap cars is that you can't always get an automatic gearbox. For me the obvious choice would be a Fiat Panda Dynamic Eco. It's quite an old car now, which may help when getting a discount (around £800), but still looks pretty funky and it costs £8,565. To add an automatic gearbox costs £800, although the specification includes air conditioning. The insurance is in lowly Group 3.

A car for the heart

Then again if Celine does not like the look of the Fiat Panda there is always the Peugeot 107 (pictured). This has a lovely friendly shape. It is a small, light and nimble car which is perfect for buzzing around town and beyond. Its engine is a three-cylinder and on longer journeys Celine might notice that it is a bit noisy. But that's the price you pay for truly astounding petrol consumption. The stats show that the 1.0 litre engine will return over 60mpg. Even though Celine wants an automatic gearbox, I don't think that will make a huge difference to the figure. The other important figure for Celine is that this is in insurance Group 3, so should be relatively cheap to cover. A three door 1.0 Urban costs £9,345, although there are some £500-£700 discounts available if Celine shops around. The automatic gearbox option adds £500 to the price, while air conditioning is £535. Incidentally, the Verve model – which has air conditioning as standard – costs £9,145.

Looking to buy?

Please write to Car Choice, Features, Independent on Sunday, 2 Derry Street, London W8 5HF or email James Ruppert at carchoice@ independent.co.uk, giving your age, address and phone number, details of the type of vehicle in which you are interested, and your budget.