Cheapest and most expensive UK locations to run a car

Driving is a lifeline for a lot of people, whether it enables our daily commute, allows us to take the kids to school and back, or helps us complete other essential tasks – our cars generally make life easier for us.

But with inflation and the rising cost of living causing price increases across the board, the costs associated with running a vehicle is becoming more and more expensive. Drivers must consider fuel costs, insurance cover, MOT fees, and car tax, which can quickly add up.

We analysed our internal customer data from more than 400 locations in Great Britain to find out how much it costs to run a petrol or diesel car in each place. The study considers the average yearly mileage of drivers in each town to calculate the fuel costs (petrol and diesel) and the average cost of insurance, as well as the maximum MOT and annual car tax fees.

The cost of running a car in the 30 most populated cities in Great Britain

It costs Brits £2,028 on average each year to drive a car in Great Britain. However, we wanted to take a deeper look into the cheapest and most expensive locations to run a petrol or diesel car in the 30 most populated cities in Britain outside of London – we’ll share more on the capital later.  
 
Our research reveals that drivers in Luton are likely paying the most when it comes to running a vehicle. In total, the costs average £2,329, with 42% (£981) of this figure being spent on insurance premiums.  
 
Drivers in Manchester also face high running costs at £2,309 per year. Insurance premiums are naturally higher in large cities compared to smaller locations, and in Manchester specifically, the average is just £5 cheaper than those available to drivers in Luton (£976). 
 
Birmingham comes in third place with average annual costs of £2,293, but this can be higher or lower depending on your annual mileage or whether the car is petrol or diesel. For diesel drivers in Birmingham the average is £2,266, while petrol drivers can expect to pay out £2,321 each year.

The five most affordable locations to run a car

The Isles of Scilly comes out on top as the UK’s most affordable location to run a car, with annual costs amounting to £1,209. Motorists in the Isles of Scilly drive fewer miles (4,487) per year than those anywhere else in the country, which means lower annual fuel costs (£691 for diesel and £727 for petrol on average). However, drivers in this location also benefit from lower insurance premiums (£255), which further brings the annual cost to run a vehicle down.

The Orkney Islands rank next with an average annual spend of £1,627, and the Isle of Wight follows closely with £1,679. Both of these areas offer affordable insurance premiums at £306 and £348 respectively.

The most expensive London boroughs to run a car

Running a car inside London can be much more costly, as the average insurance premiums are much higher in the capital than in other locations. The four most expensive boroughs are all located in East London: Newham, Tower Hamlets, Barking and Dagenham, and Hackney.

The city’s most expensive borough to run a car is Newham, where total costs average £2,556 per year. It’s also the most expensive London borough to insure a car, with premiums averaging £1,274.

Tower Hamlets follows as the next most costly, averaging £2,399 per year. The average annual mileage for drivers in this borough is 5,986 miles, which is the lowest in our top ten, potentially due to its central location – so naturally less money is spent on fuel. The average annual fuel costs in the borough comes to £921 for diesel or £969 for petrol car drivers. However, insurance premiums are still relatively high at £1,209.

Barking and Dagenham ranks in third, with costs averaging £2,394 for drivers there. Drivers in this borough average the highest annual mileage in the top 10, which pushes fuel costs up (£1,046 for diesel and £1,101 for petrol). However, their insurance premiums are more affordable than in Newham and Tower Hamlets, at £1,076.

Hackney and Haringey take fourth and fifth place, with annual costs for drivers in these boroughs averaging £2,387 and £2,353 respectively.