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Best new cars for under £500 per month

With a generous budget of £500 per month, you can get into some of our favourite premium cars

If you’re lucky enough to have up to £500 per month to spend on PCP finance for a new car, you have a huge amount of choice. It allows you to go for any number of mainstream family cars, although with this budget you’ll likely be most interested in the premium badged executive cars and large SUVs that are available around this budget.

The cars that we’ve picked in this round-up of the best cars you can get for £500 a month are all Auto Express Award winners in 2020, so you can be sure that these really are the best cars around for less than £500 a month. There’s a good amount of choice, from SUVs to executive saloons and even our 2020 Car of the Year.

We’ve stuck mostly to a deposit of around 10-20 per cent on the PCP finance deals listed below. That’s because this is close to what most people put down on a finance deal from a new car dealer - yet if you’re trading in another model you might be able to get an even better deal. We’ve stuck to a mileage of 10,000 per year.

Personal Contract Purchase (PCP) requires an initial deposit in most cases and a set number of monthly instalments thereafter, usually for about three years. There’s also the option of paying a final lump sum for the car at the end so that you then own it. If not, you can use the vehicle’s remaining value to trade in for a new model, or hand back the keys  to the dealer and find something else.

Best new cars for under £500 per month

Land Rover Defender - £468 per month

  • Model: Land Rover Defender 90 D200
  • List price: £40,330
  • Deposit: £7,000
  • Monthly payments: £467.91
  • Number of payments: 36
  • APR: 5.9%
  • Optional final payment: £21,350

The Land Rover Defender won our Mid-size Premium SUV of the Year award this year - despite the name conjuring images to uncomfortable and uncompromising off-roaders of the past, the new Defender is a brilliant all-round SUV and entry models can be had for less than £500 per month.

The new Defender is a fantastic off-roader, as you’d expect given the name, yet it’s equally at home on the road. The Defender uses clever technology alongside plain good engineering to achieve this - it’s comfortable, easy to drive and fun.

Even the in-car tech is strong, usually a weak spot for Land Rover. The D200 version that we’ve picked offers a decent balance between performance and economy, and had enough pulling power for towing as well. It feels luxurious inside and well worth the monthly cost.

Check out the latest prices for used Land Rover Defenders on our sister site Buyacar...

Mercedes GLA - £436 per month

  • Model: Mercedes GLA 200 Sport
  • List price: £33,605
  • Deposit: £3,000
  • Monthly payments: £426
  • Number of payments: 36
  • APR: 5.9%
  • Optional final payment: £16,975

The Mercedes GLA has made a big step up with the latest version. It shot to the top of the class in 2020 when it launched and even won our Small Premium SUV of the Year Award.

The GLA uses high quality materials on the inside to create a very upmarket look and feel, plus there’s a fantastic infotainment offering in the shape of the latest MBUX set-up. It’s all brought together into a very pleasant cabin that justifies the GLA’s price.

The rest of the package works as well - there’s a great engine range with a balance of efficiency and performance plus a big 495-litre boot and plenty of passenger space as well. We’ve picked a petrol model as this version is smooth, quiet and good for all sorts of trips.

Check out the latest prices for used Mercedes GLAs on our sister site Buyacar...

Tesla Model 3 - £497 per month

  • Model: Tesla Model 3 Long Range
  • List price: £46,990
  • Deposit: £10,000
  • Monthly payments: £497
  • Number of payments: 48
  • APR: 4.9%
  • Optional final payment: £18,476

With a fairly hefty £10,000 deposit, it’s possible to get your monthly payments below £500 per month on a brand new Tesla Model 3 in the best spec: Long Range. This means you have a range of around 360 miles from a single charge, making it easily possible to use the Model 3 as your only car.

Just think about the petrol savings as well - Tesla reckons it’ll be about £70 per month next to a normal car - and that starts to look like a better deal. The Tesla won our Compact Executive Car of the Year Award, plus Premium Electric Car of the Year and has even been an Auto Express Car of the Year in the past, too. 

It brings together so many great elements - the electric powertrain means it’s quiet and serene most of the time, yet it’s also good to drive, comfortable, practical and packed with tech. It’s a fantastic company car but makes sense for just about anyone who can charge up at home.

Check out the latest prices for used Tesla Model 3s on our sister site Buyacar...

Mercedes E-Class - £461 per month

  • Model: Mercedes E 220d Sport
  • List price: £39,730
  • Deposit: £5,000
  • Monthly payments: £460.93
  • Number of payments: 36
  • APR: 5.9%
  • Optional final payment: £16,975

The latest Mercedes E-Class is a brilliant all-rounder, which earned it the title of Executive Car of the Year 2020. Updates to the range this year made it worthy of the title, particularly when it comes to in-car tech.

Thanks to a new fully digital dashboard, using two 12.3-inch display screens, it feels thoroughly modern inside and has a very upmarket look. The materials inside are superb and the ride is so smooth that there are no creaks from anywhere.

Even the 2.0-litre diesel in the E 220d is quiet, and it’s really efficient as well. Throw in superb passenger space in every seat, a huge boot and strong performance and you’ve got a brilliant saloon car for less than £500 per month.

Check out the latest prices for used Mercedes E-Class models on our sister site Buyacar...

Skoda Octavia - £407 per month

  • Model: Skoda Octavia SE L First Edition 1.5 TSI 150PS
  • List price: £25,150
  • Deposit: £500
  • Monthly payments: £407
  • Number of payments: 36
  • APR: 4.1%
  • Optional final payment: £10,390

The Skoda Octavia was the Auto Express Car of the Year 2020 - and if you’ve got up to £500 per month to spend then you can get into what is currently the top-spec model easily. With a £500 deposit, you’ll only pay just over £400 per month for this excellent new car.

The Octavia is great to drive - comfortable and composed - and offers better practicality than just about anything else of a similar size. The huge boot and spacious rear seats mean it’s a fantastic family car.

The Skoda is also really well equipped - the SE L First Edition comes with just about everything you’d want from a new car, and the 1.5-litre TSI engine is quiet yet efficient as well. It’s not the most glamorous car for less than £500 per month but it’s still a brilliant one.

Check out the latest prices for used Skoda Octavias on our sister site Buyacar...

More of the best new car deals

Looking for more new car deals? Check out our comprehensive round-up of the best deals available right now or visit our sister site Buyacar... 

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