Car Choice: Wheels fit for a teen

David Smith's daughter, aged 18, recently passed her driving test and will need a small, safe car to drive back and forth the 30 miles to her university in October. David is looking for a five-door hatchback that is economical, safe and not too expensive to maintain. He has found several good cars local to him, including a Polo, a Citroen ZX and a Peugeot 106, all for less than £2,000 (the absolute maximum budget).

The problem is insuring the car. He has a full no-claims bonus and an accident-free history, but "putting her on my insurance" is not allowed and insuring her for TPF&T is about £1,500 a year.

Insuring anyone under 25 to drive is a contentious issue. In the past parents could add their licence-holding offspring to their policies for relatively small rises in the premium. In the past few years, however, the trend has been to insure the driver who represents the greatest risk and that, statistically, is the younger driver. Finding the best premium quote is still a case of making phone calls, internet searches and finding a good broker to do some of the work for you.

There are also some things that David's daughter could do. Although it is not cheap, taking an advanced driving course could reduce the premium. Another way around the problem is to take advantage of free insurance schemes and low cost finance. Citroen has been the most notable provider although in recent years the insurance goalposts have been moved. Previously for drivers aged 17 and above, the schemes currently on offer are restricted to 21- to 80-year-olds. That rules out the Citroen C2, Nissan Micra and Seat Ibiza.

A car for the heart

A safe, modern, five-door hatchback for £2,000 sounds impossible, but there is at least one car which should fit that bill: a Daewoo Matiz. Scanning the small ads it is possible to find a 1998/1999 Matiz often in comprehensive SE+ specification within or near budget and in tidy condition. The engine is small and, some may think, underpowered at 800cc but it has proved reliable. Cars were sold with a three-year warranty, a free servicing package and were owned by caring private owners.

On the safety front it has always had driver and passenger airbags as standard. Also back in the days when Euro NCAP rated to four stars, the Matiz scored a very respectable three stars, which is impressive for a small car. It is also a practical one with five doors, a nice interior and flexible storage options.

There is more good news because the insurance is only group two and that should make David's premium more reasonable. David should negotiate to pay the premium in monthly instalments to spread the pain.

A car for the head

Buying a car on finance is a shortcut to getting a modern car in easy-to-manage chunks, although I admit David's £2,000 budget won't go far and there is still insurance to consider. At the moment Kia only requires a £1 deposit to secure all new and used models up to one year old. The repayment term can last from 24 to 60 months and the typical annual percentage rate is about 10 per cent. The £7,508 Kia Rio is a lot of car for the money, essentially a Golf-sized five-door, but power steering is extra.

New Protons are available without a deposit at 0 per cent annual percentage rate and repayable from 30 to 60 months. It depends what David can negotiate with the dealer. The £6,999 Proton Satria is a three door and is basically equipped.

The best deal is by Daihatsu on its three-door Charade. A £1 deposit buys a £6,295 EL, costing £139 a month over the next 36 months. David would have the option of a final payment of £2,275. By then his daughter will have left university and may be able to pay that sum or insure the group-three car herself.

* Car Choice: Please write to Car Choice, Features, Independent House, 191 Marsh Wall, London E14 9RS, or e-mail James Ruppert at carchoice@independent.co.uk giving your age, address and contact number, and details of the type of vehicle you are interested in.