Can You Buy a Car for £500 in the UK? The Truth Behind the Bargain

In this article, we’ll dive into what you really get for £500, the hidden costs of owning a budget banger, and whether it’s worth spending a little more to save yourself a fortune later.

Why £500 Cars Still Exist in 2025

The used car market has been all over the place the past few years. Prices shot up during the pandemic, and while they’ve started to cool, demand is still high for cheap runarounds.

So why are there still cars listed at £500 or less?

• End of life vehicles – Cars with big repair bills that owners don’t want to pay.

• Trade clear-outs – Dealers sometimes offload old stock quickly just to clear space.

• MOT failures – Cars that won’t pass without serious repairs.

• Project cars – Vehicles needing lots of TLC, usually for hobby mechanics.

Basically, a £500 car is rarely a golden find – it’s usually cheap for a reason.

The Hidden Costs of a £500 Car

Buying a £500 car is one thing, keeping it on the road is another. Here are the costs that usually creep up on buyers:

• MOT repairs – A £500 car is often close to failing its MOT. Repairs like suspension arms, brakes or exhausts can easily cost £500–£1,000.

• Insurance – Insurers don’t love old, high-risk cars. Premiums can be higher than you’d pay on a newer model.

• Fuel economy – Old bangers rarely sip fuel. A tired 1.6 petrol might only manage 30 mpg compared to 45+ in something newer.

• Breakdowns – Recovery fees, missed work, extra stress – all add to the true cost.

• No warranty – If it dies a month later, that’s your problem.

£500 Car vs £1,500 Car: What’s the Real Cost Over a Year?

To see if a bargain really makes sense, let’s compare a typical £500 car with a slightly more expensive £1,500 option.

👉 As the table shows, the “cheap” £500 car can easily end up costing the same — or more — than a better £1,500 option once you factor in fuel, insurance, and repairs.

When a £500 Car Makes Sense

To be fair, there are situations where a £500 car could work out just fine:

• You only need it for a few months.

• You’re a mechanic or know one who’ll help cheaply.

• You don’t mind scrapping it if it dies suddenly.

• It’s a simple, well-maintained model with a proven record.

Think of it less as a long-term investment and more like renting a car you might get to keep for a year.

Red Flags to Watch Out For

If you’re considering a £500 car, here’s what you should check before you hand over the cash:

• V5C logbook – Make sure it’s present and matches the seller.

• MOT history – Check it online to see fail reasons and advisories.

• Vehicle history check – A £10 check on TopCarCheck could save you from buying a stolen or written-off car.

• Rust – Especially on sills, chassis and suspension mounts.

• Oil leaks – A leaking rocker cover or sump can quickly add up in garage bills.

Smarter Alternatives to a £500 Car

Instead of gambling on a £500 banger, here are smarter routes you could take:

• Look at £1,000–£2,000 cars – Often much better value overall.

• Buy from private sellers, not dealers – You avoid dealer markups.

• Ex-fleet or company cars – Usually maintained properly.

• Auction bargains – Risky but sometimes cheaper than forecourts.

Bottom Line: Is a £500 Car Worth It?

A £500 car might sound like the cheapest way onto the road, but in reality it’s usually a false economy. Between MOT failures, high insurance, and poor fuel economy, that “cheap” buy often ends up costing as much as a car three times the price.

That said, if you only need short-term transport, are mechanically savvy, or just love a challenge, a £500 car could still make sense. But for most drivers, stretching the budget to at least £1,000–£1,500 is a far safer bet.

👉 Before you buy any bargain motor, run a quick car history check. Spending a tenner now could save you thousands later.