I would certainly suggest to buy new with free insurance. You have the reassurance of your child being in a much safer vehicle than one that's five or so years older. At £1000 - £2000, you would be looking at cars ten years old or less. Insurers know that drivers are less likely to take as much care with them due to their low value. Whatever you pay on your insurance, excluding the cover it provides, is a direct loss. Spend £3000 this year, £2000 the next year and that money is gone forever. Buy a car with free insurance, the only hit you are going to take is depreciation. The car would depreciate anyhow, but it offsets your insurance cost massively. What I would look at is PCP. Take a look at our Finance page, it shows manufacturers that offer free insurance as well - these include the new Volkswagen Polo, the new SEAT Ibiza, Peugeot's Just Add Fuel offer etc: www.honestjohn.co.uk/cheap-car-finance-advice/ However, these often only apply to drivers over the age of 18 or 21 so read the small print.