How to buy a brand new car for the cost of a monthly mobile phone bill

  • Five cars you could buy for the same cost of your phone bill
  • We show how affordable new cars are nowadays
  • Guide to the different finance methods included

It almost seems too good to be true, but you can now own a brand new car for a monthly payment so small it’s comparable to the cost of a romantic dinner out for two.

Parkers has harvested the best car deals around this Easter and our research proves it is possible to buy a new model with monthly payments comfortably under £100 a month. The cheapest rates we found started at just £43 a month - not much more than the cost of many people’s mobile phone bills.

How to buy a car for the cost of a cheap pair of shoes

Super-cheap deals are made possible by the new trend to finance new cars rather than buy outright. Around 80 percent of purchases are funded this way nowadays, as buyers lap up the more affordable way of paying for their next car.

Here’s a potted guide to the main options available when you look to finance your next vehicle:

  • Personal Contract Purchase (PCP) The most popular form of new-car finance. Keep monthly repayments lower by deferring payment of the car’s future residual value until the end of the contract. It’s flexible too - you can choose to flip into another new car at the end of the term, hand back the keys and walk away, or pay a lump sum and own it outright
  • Hire Purchase (HP) This is where you spread the total cost of the car over a set period and pay off the loan monthly. You don’t own the car until you’ve made the final payment
  • Leasing Also called contract hire, you never own the car. Essentially like a long-term holiday rental, you simply hire the car and never actually own it
  • Buy outright Some people shy away from credit and prefer to buy outright, perhaps funded by your own savings or borrowing from a bank, building society or family

With every type of car finance, focus in on the monthly repayment to make sure you can afford the bills. But don’t forget the total cost of the loan and annual interest rate, or APR, to make sure you’re not paying through the nose for it.

With historically low interest rates, it’s not uncommon to see interest-free or zero-percent deals available. These are A Good Thing and mean you’re not paying a penny for the convenience of financing your next car.

To get you started, why not check out the Parkers Car Finance page with all the latest news, advice and deals.

5 cars you can own for the same cost as your monthly phone bill

Obviously, everyone’s idea of a bargain - and monthly phone bill - is different, but these five small cars can be had for comfortably less than £100 a month.

Toyota Aygo - £52 a month

There are some cracking finance deals out there, bringing the cost of brand new cars down to unbelievably affordable levels. If you have the funds to place a reasonably generous deposit, you can even drive away a Toyota city car for just £52 a month*. That’s on a three-year PCP deal with a £3,000 deposit, with repayments spread over three years at 4.9% APR. More on this offer here.

VW Up - £64 a month

Lease the smallest Volkswagen for buttons on a two-year contract with independent finance provider on this deal that requires just a £384 initial payment and £64 a month*. This deal would suit a city dweller, as there’s a 5000-miles-a-year annual usage limit. More on this offer here.

Suzuki Celerio - £79 a month

This is a cracking deal direct from the manufacturer, bringing the smallest Suzuki within reach on a PCP deal for just £79 a month*. You’ll need to stump up £1,889 in deposit and the APR comes in at 5.9% over the 43-month deal. More on this offer here.

Citroen C1 - £99 a month

Pick up a baby Citroen city car for £99 a month* on the company’s Elect 3 PCP scheme. The initial payment comes in at £2,147 and Citroen will add a further £500 as part of a special offer. More on this offer here.

Renault Twingo - £43 a month

For extreme savings, simply increase your downpayment up front. Okay, so this goes against the grain of arranging car finance in the first place, but by putting down a hefty £4,300 deposit on a Twingo Play SCe 70, we managed to squeeze our monthly payments down to a microscopic £43*. That’s on a Renault Selections  PCP with an APR interest rate of 6.4%. More on this offer here.

A brand new car or a nice meal out once a month? Our selection above shows just how affordable new cars are nowadays. We’ve focused on the cheapest deals, which is why they’re all small city cars - just remember you can finance any size of vehicles.

*Deals are correct at time of publication. Everyone’s financial circumstances are different and credit is not always available – Parkers cannot recommend a deal for you specifically. These deals are indicative examples of some packages available this week.

Still not sure on what car to buy? Our latest articles could help:

Petrol vs diesel – the great debate

Top 10 affordable fast cars

Non-deposit car finance: does it exist?

Top 10 cars for £99 a month

Why you should buy a 16-plate car