Car running costs: it's more than just insurance!

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How much does it cost to run a car? Being a car owner is an expensive business… we reveal the biggest costs and show how to drive them down


Buying a car is one of the largest purchases you’ll make, so it's important to also look at the total cost of motoring – or how much a vehicle is going to cost to own.

The initial price of a car is obviously the biggest expense, but then it's depreciation (the difference between a car’s value when you buy it and when you come to sell it), followed by:

Most owners overlook depreciation because it's not a cost you physically pay (such as buying fuel), but it's worth considering because some new cars can depreciate by as much as 50% over the first three years of their life.

Average cost of running a car

Various attempts have been made to calculate the total cost of motoring, but it's hard to quantify because figures depend on factors such as the type of car bought, your average mileage, cost of fuel, where you live and your age.

For instance, a 2018 survey by Kwik Fit estimated the average UK motorist spends £162 per month running a car. Another report suggested that it costs a massive £206,624 to run a car over a lifetime.

To make life easy, there are free online tools for finding running costs for exact makes and models of used cars. We've also put together our own car running cost calculator to help you work out what your car costs you over the course of a year and shared some tips to help you save money. 

You can also compare how much people across the UK are willing to spend to keep their cars running 


Car running costs explained

Purchase price: the cost of buying a car outright or via monthly finance such as a personal loan or HP – or as is increasingly becoming the case – paying a monthly lease for a car via a PCP (Personal Contract Purchase) or PCH (Personal Contract Hire).

Depreciation: this is the difference between a car’s value when you buy it and when you come to sell it.

Fuel: depending on how many miles you rack up, the cost of petrol and diesel is likely to be your biggest running cost. Even if you own an electric car it's still not entirely free because you’ll need to pay for the electricity to charge up your car’s batteries, but it’ll be significantly lower.

Insurance: the cost of insuring your car. This is a legal requirement and there are various levels of cover (from third party to fully comprehensive).

Road tax: sometimes called car tax, but correctly known as Vehicle Excise Duty (VED), this can be paid annually or monthly by direct debit. The cost of tax depends on the age of the car, original purchase price and the amount of CO2 emissions it puts out. It varies, from nothing at all for 100% electric cars and classics more than 40 years old, to as much as £2,000 in the first year for a gas-guzzling supercar.

Servicing and maintenance: whether it’s an annual service, tyre changes or more routine maintenance such as engine oil top-ups, it all adds up.

MOT: all cars require their first MOT (or annual roadworthiness test) three years after they’re registered. There are some exceptions, such as most classic cars more than 40 years old.

Breakdown cover: some cars are more reliable than others, but should the worst happen, breakdown cover is a great investment. There are loads of providers and various levels of cover.

Car cleaning: of course you can do it yourself, but if you visit a car wash, or treat your pride and joy to a hand wash, it will cost you at least £5 each time and it all adds up.

Parking/tolls: parking, especially in city centres, can be expensive. Additionally, some drivers also regularly pay motorway and/or bridge tolls.

How much does it cost to run an electric car?

The energy group EDF claims UK drivers each spend £56,000 on petrol during their lifetime, but that the average lifetime cost of charging an electric car is just £15,000.

Using the free Journey Cost Savings Calculator on the Government-backed Go Ultra Low website, over a year you could save £3,416 on a daily 100-mile journey, simply by switching to a pure electric Nissan Leaf from a typical petrol family hatchback.

According to the Energy Saving Trust, a full charge for a pure electric car will cost around £2 to £4 and give a typical range of 100 miles. By way of comparison, driving 100 miles in a petrol or diesel car costs around £10 to £13. To look at it another way, you’ll save around £100 for every 1,000 miles you drive, making the cost of running an electric car quite a bit less.


10 tips for reducing car running costs

1) If you only use a car for shorter journeys (25 miles or less), consider a plug-in hybrid (a car with a conventional engine and batteries). That way you can run in electric-only mode (usually up to 30 miles) and you only pay to recharge overnight or at work. Better still, switch to a 100% electric vehicle and never visit a filling station again.

2) Adjust your driving style to squeeze as many miles as possible out of each tank of fuel. Try to drive smoothly by accelerating gently and reading the road ahead to anticipate the actions of other drivers and potential hazards. Stick to the speed limits and avoid using air conditioning.

3) Use price comparison sites and apps to shop around for everything from the cheapest breakdown cover, replacement tyres and car battery price, to the best value parking and petrol.

4) If you run more than one car, consider a multi car insurance policy to save money. You can also save by bundling your car and house insurance together in a MultiCover policy.

5) Carry out simple MOT checks before heading off for the test. Faulty lamps, tyres and windscreen wipers top the list of most common reasons for MOT fails, yet they can easily be fixed for much less than the price of a re-test. The current maximum fee for an MOT is £54.85, but shop around online and you only need to pay half that.

6) Get your car serviced every year – and maintain it in between. This way problems are likely to be caught early on when they’re cheaper to fix. Unless you have a car on finance which must be serviced at a main dealer, shop around for your annual service.

7) If you're not ready to switch to electric, choose a car with a low total cost of ownership. These tend to be superminis and city cars because they are cheaper to buy, more economical and cheaper to insure, tax and service. We recently took a look at the cheapest new cars to own over three years, so if you’re thinking about buying a new car, this list might help.  


8) Try your hand at DIY maintenance and repairs to save on eye-watering garage labour costs. It’s possible to carry out most regular car maintenance checks yourself and even some minor repair jobs, but unless you're highly competent and have access to the right tools and equipment, some tasks are best left to the professionals.

9) Avoid parking tickets and fines for driving offences such as speeding and using a mobile while at the wheel. For instance, the minimum penalty for speeding is a £100 fine, plus three penalty points, which may also increase your insurance price.

10) Losing keys can be a costly mistake. If possible, avoid buying a new key from a dealer (it could cost as much as £150-£300) and try instead to get a replacement from a key cutter like Timpson, or call a mobile auto locksmith.


  • Do you commute to work? Ever wondered how many miles a year you travel, or how long you spend stuck in traffic? Check out our commuter calculator

I'm an experienced journalist, digital editor and copywriter, now specialising in motoring. I’m editor of Automotive Blog and have worked across the media in newspapers, magazines, TV, teletext, radio and online for household names including the BBC, GMTV, ITV and MSN. I’ve produced digital content in the financial sector for Lloyds Bank, Nationwide and the Money Advice Service. I'm married with two children and live near Bath in Somerset.

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