Drivers are more focused on value than ever. With climbing fuel bills and chunky insurance payments, there’s never been a more important time for finding a good deal on a new car than right now. Fortunately, there are plenty of great options here at Motors to get you behind the wheel of a new motor for a reasonable monthly outlay.

The best cars for under £200

All of the cars that we are looking at today are available for under £200 per month on a standard finance contract. We’ve set a £1,000 deposit payment, with a 48-month term and a 10,000 annual mileage limit. At the end of the policy, you can either hand the car back or make an optional ‘balloon’ payment in order to own the car – though policies differ between providers. If you have any questions about an individual finance agreement, it’s always worth speaking to the dealer. Let’s take a look at what’s on offer.

1. Mazda MX-5 - (2005-2015)

Just because you’re shopping on £200 per month budget doesn’t mean you have to pick something dull. In fact, with countless MX-5s available at this price point, there’s plenty of opportunity to get behind the wheel of something quite exciting.

We’re big fans of this generation of MX-5, too. It’s got all of the hallmark qualities that people love about this two-seater – fine handling, great reliability and compact size – but it feels modern enough to be driven every day. The folding fabric roof is also a breeze to operate and because of its simplicity, it’s far less likely to go wrong than a hard-top version. Just bear in mind that you’ll have to keep on top of repairs and maintenance to keep this sporty number at its best.

Best Features

  • Great handling makes the MX-5 fun to drive.
  • Relatively inexpensive to run for a sports car.
  • Good track record for reliability.

Things to consider

  • Practicality is limited.
  • Tyres may cost more than for a ‘normal’ car.
  • Folding fabric roof does make the interior noisier at speed than a traditional hatch or saloon.

2. Seat Arona - (2018-present)

Compact crossovers are immensely popular at the moment and one of the best about – the Seat Arona – is easily available for our £200 budget. Why is it so good? Well, Seat has been able to pinch all of the best bits of the Volkswagen T-Cross but implement a range of its tell-tale styling cues which make the Arona just a little more exciting than its German cousin.

It’s efficient, practical and surprisingly spacious inside, too, while the build quality is excellent throughout. The Arona’s range of peppy engines make it good to drive, too, but also result in lower insurance premiums and far easier-to-digest fuel bills. You’re able to get the Arona in a range of funky colours, too.

Best Features

  • The Arona is spacious inside but relatively compact on the outside.
  • Engine options are plentiful but all are efficient and cheap-to-run.
  • Good sweep of standard equipment on all models.

Things to consider

  • Not the largest SUV out there – you may want the larger Ateca if you need more space.
  • Ride can feel a bit firm on versions with bigger alloys.
  • Look out for car park dings and scratches – the Arona is a popular around-town car.

3. Volkswagen Passat - (2015-2022)

It feels like everyone knows the Volkswagen Passat. It’s something of a ‘multi-tool’ car, applicable to all types of uses and handy for all types of drivers. Available both as a standard saloon or a spacious estate – both of which fall under our £200 monthly budget – the Passat is superb at travelling long distances in loads of comfort. Though petrol engines are available on the Passat, it’s the diesels which feel like the best fit for this Volkswagen as they’re quiet and refined when moving at speed.

Inside, you’ve got trademark Volkswagen build quality and though lower-spec versions might feel a bit dull, everything is brilliantly put together and ideal for family driving.

Best Features

  • The Passat is incredibly comfortable so it’s great at longer trips.
  • All versions get a great level of build quality.
  • Efficient engines are available.

Things to consider

  • Lots of Passats have high mileage – look out for good service history.
  • Lower-spec versions can appear a bit plain inside.
  • Diesel versions will need good maintenance to remain at their most efficient.

4. Toyota Aygo - (2014-present)

The Aygo epitomises the city car. It’s compact but cleverly packaged while its small engine delivers nippy performance which makes it ideal for darting in and out of traffic. We also like the Aygo’s steering, which makes it a doddle to drive around town or for navigating a tricky car park.

Naturally, the Aygo is a big hit with first-time drivers, so you’ll want to check around it for scuffs and scrapes – along with kerbed alloy wheels – but find a clean one and you’ll have yourself a car that won’t cost much to run each month while regular repairs shouldn’t be too expensive either. Thanks to its low insurance group the Aygo will be one of the cheapest cars on this list to get cover for, too.

Best Features

  • Low running costs overall.
  • Small proportions make it easy to live with and park.
  • Great for urban or inner-city drivers.

Things to consider

  • Not as comfortable at high speeds as other cars here.
  • Popularity as a first car means used models are prone to scrapes.
  • Engine is quite vocal when used hard.

5. Mini Hatch - (2014-2024)

The Mini Hatch represents a very stylish way of getting about for under £200 per month. The Hatch is quite classic in its design and its popularity means that there are loads of options in the used market. At the Mini’s heart lies its style; echoing design points from the classic original, the Mini still looks fresh today. Inside, you’ll find an interior that feels sturdily built and great to look at, with all of the major buttons and switches having a high-quality feel to them.

The Mini Hatch is also superb to drive, regardless of which version you opt for. Nicely weighted steering combines with a stuck-on feeling through the bends to make a car which feels excellent from behind the wheel. It all helps to add a little sparkle to any type of drive.

Best Features

  • Great to look at with lots of colour options out there.
  • Interior feels well built with plenty of kit.
  • Plenty of availability on the used market.

Things to consider

  • Running costs will be higher than rival offerings.
  • Ride can be firm on certain versions with larger wheels.
  • Naturally, not the most spacious.

6. Mitsubishi Outlander - (2013-2022)

The Outlander was the car that kicked off the hybrid SUV revolution and these days it still represents a fine choice for drivers after a spacious model that won’t cost too much to run. While the interior of the Outlander isn’t the most exciting, it’s all very hard-wearing and feels as though it has been designed specifically for busy families.

For plug-in hybrid versions you’ll need to think about where you’ll charge – Outlanders are only at their most efficient when topped up routinely – but there are ‘regular’ versions out there should you not fancy the electrified route. Either which way, you’re still getting a very spacious SUV with plenty of in-car equipment.

Best Features

  • Hybrid is very efficient even by today’s standards.
  • Spacious and practical inside.
  • Materials aren’t the prettiest but they’re hard-wearing.

Things to consider

  • You’ll need to think about where you’ll charge the PHEV up.
  • Only ‘regular’ petrol and diesel versions get seven seats – PHEV is five-seats only.
  • Not the most exciting interior

7. BMW 1 Series - (2011-2019)

The BMW 1 Series is a car which combines a sporty design with a practical hatchback layout and plenty of interior tech to create something which is great to use day-to-day but still feels special enough to raise a smile. It’s available with a great range of engines, from punchy petrols to efficient diesels, with the latter being a great option for drivers doing longer journeys.

Just bear in mind that some BMW 1 Series cars are driven hard due to their sporty nature, so make sure that any model that you’re looking at has been cared for. Because of its more powerful engines, the 1 Series will be more costly to insure than others here – so bear that in mind when putting your budget together.

Best Features

  • All versions of the 1 Series feel great to drive.
  • Lots of equipment as standard.
  • Premium-feeling materials used throughout the cabin.

Things to consider

  • Will prove more expensive to insure than others here.
  • Expect higher repair and maintenance costs.
  • Rear seat space isn’t the best.

8. Nissan Qashqai - (2014-2021)

If you’re looking for an all-rounder, then the Qashqai should be firmly in your sights. It’s a car that can slot into all types of roles as from a comfortable commuter to a solid people-mover the Qashqai shines. You’ll find some good materials inside, too, though a few plastics feel a bit harsh to the touch.

It’s good to drive, too, behaving like a far smaller car than it actually is. A number of decent engine options are there to choose from as well, alongside manual and automatic gearboxes. However, it’s the Qashqai’s all-round usefulness which really helps it out as with its large boot and comfortable interior, it’s a model which is up to any challenge.

Best Features

  • Comfortable and spacious inside.
  • Decent boot capacity.
  • More exciting to drive than you might think.

Things to consider

  • Popularity as a family car means used Qashqais can sometimes feel quite tired.
  • Lower-powered engines are a bit baggy for the Qashqai.
  • Some interior plastics aren’t the best.

9. Citroen C3 Aircross - (2017-present)

The C3 Aircross has the kind of quirky approach that you’d expect from a Citroen. Earlier models famously came equipped chunky black wheel arches and while they may look a little odd, they’re all about practicality – these areas of plastic help to protect the Aircross from trolley and door dings.

Inside, there’s a light and airy cabin to explore with a decent number of cubbies and storage areas that can help to keep things as clutter-free as possible. The driving experience you get from the C3 Aircross is definitely more comfort-focused, too, as with Citroen’s typically softly-sprung approach to suspension, it’s a car which does well to shake off the worst of the lumps and bumps in the road.

Best Features

  • Chunky looks help the C3 Aircross to stand out.
  • Interior is designed to be as practical as possible.
  • Slightly raised seating position gives a good view out.

Things to consider

  • Some interior materials feel a bit cheap.
  • Not the most inspiring to drive.
  • Can feel quite loud on the motorway.

10. Abarth 595 - (2009-present)

We’re finishing with something a little more flamboyant for that £200 monthly budget. The Abarth 595 is a car with bags of character. From start-up, the 595’s vocal exhaust note makes its presence known while on the move, it burbles and crackles along to ensure that nobody misses it.

As it’s based on the standard Fiat 500 the Abarth 595 is still very easy to live with and it’s a breeze to park and position, too. Firmer suspension means that it’s not as comfortable on a daily basis as the Fiat, but with its turbocharged 1.4-litre engine it’s a decent amount quicker, too. You can also get the Abarth 595 in a cool convertible version if you’re after that wind-in-your-hair sensation.

Best Features

  • Whole car has bags of character.
  • Stylish design and plenty of exterior colour choices.
  • Interior has plenty of go-faster performance touches.

Things to consider

  • Ride is quite firm due to sporty suspension.
  • Raised seating position might not be for everyone.
  • Fuel use will be higher than with a standard 500.

What affects the monthly cost on used car finance?

There are a few factors that affect how much you’ll pay for finance. Different finance packages can change the amount you’ll spend with Hire Purchase (HP), for example, bringing a higher monthly cost as you’re effectively paying off the full price of the car before you get to own it at the end.

The contract length will also tweak prices, with a longer-term bringing them down. Naturally, a higher deposit will also lower your monthly payments, while reducing your estimated mileage will do the same. Bad credit will also mean you don’t get a preferable rate of interest, meaning that your payments will likely be higher than those of someone with a good credit history.

Tips for buying a used car on finance

You may want to do some investigation before heading into the world of finance. For instance, would you want to pay a balloon payment at the end of your term? This is a large lump sum that you pay at the end of a finance agreement in order to own the car – or you hand the vehicle back to the supplier and carry on with a new model.

As with all cars, we’d still advise doing a history check to ensure that there is no outstanding finance on it. If there is, you could be left liable for the payments. If you’d like to find out more, then check out our used car finance guide.