The running costs of a car

What are the costs of running a car?

If you’re new to driving or simply trying to get a grip on your annual budget, you’ll soon discover that being a motorist can be expensive. So it makes sense to work out how much you need to set aside to run your car, and where you can make savings.

You can divide costs into two types:

• Running costs – the day-to-day costs of running your car, such as fuel, servicing and repairs

• Standing charges – the costs of owning a car, whether you drive it much or not, such as vehicle tax and insurance.

What running costs do I need to consider?

Fuel

As well as the price, your car’s fuel efficiency, how often you use your vehicle and the way you drive also impact how much you spend on fuel.

If you’re in the market for a new or used car, you’ll want to consider the fuel type too, and how that can impact running costs. When it comes to running petrol vs diesel cars, petrol tends to be cheaper at the forecourt, but diesel can be more economical for those driving longer distances.

Petrol and diesel prices can also vary widely across the UK. For example, filling stations on motorways can be more expensive. It’s a good idea to get to know your local area and which locations or brands have the cheapest fuel.

Meanwhile, if you have the option to do it from home, the cost of charging an electric car can be lower than filling up at the petrol station. And although electric cars do tend to have a higher price tag, the market for used electric cars is growing.

Tyres, wiper blades, fluids and other parts

Some car parts, such as oil filters, wipers, bulbs and even some brake parts, need replacing fairly regularly, so you’ll need to factor this in when calculating running costs.

Getting into the habit of regular car maintenance is important for the safety and reliability of your car, but it could also save you money in the long run. Taking care of tyres, for example, can make them last longer and improve your car’s efficiency.

Fluids such as oil and brake fluid are typically replaced as part of an annual service, but you may have to top them up during the course of a year. Some people with older cars may find that with E10 fuel (the standard unleaded fuel) they need to replace seals and hoses in the fuel line more often.

Electric cars have fewer moving parts than diesel and petrol cars, so they have lower maintenance needs. For instance, you won’t need to change the oil. But it’s worth noting that you’ll still need to regularly check things such as the tyres, suspension and brakes, as well as keep an eye on the battery.

Service and MOT

If your vehicle is more than three years old, it will need an annual MOT to make sure it’s safe to use on the road and meets environmental standards. There’s a maximum amount that MOT testing garages can charge, but they may charge less if they choose to.

The current maximum fees:

• Cars: £54.85

• Motorbikes: £29.65

Note that this is just the charge for the test. If your car fails its MOT due to major faults, it could cost significantly more to make your car roadworthy again.

Vehicle manufacturers recommend regular servicing to keep your car running smoothly. This may be either when you’ve done a set number of miles or within a set timeframe.

Although it may seem like just another expense, getting a regular service could help you avoid bigger issues and more expensive repair bills further down the road. Keeping your car in tip top condition can also improve efficiency and can help your car retain its value.

Repairs

Even with regular servicing, things can still go wrong. Necessary repairs could vary massively in complexity and expense, from a cracked windscreen to a blown head gasket.

Obviously, it’s impossible to predict how much your car will cost you in repairs. New cars come with a warranty, but buying a used car is more of a gamble. Some dealerships offer their own warranties on used cars that cover repairs, meaning you could get them for a fixed cost.

Parking and tolls

Many places, particularly large cities, now have charges for resident parking. Some local authorities also add a surcharge on resident parking permits for diesel vehicles because of pollution.

Parking charges when you’re out and about need to be factored into costs. Don’t ignore them, as parking fines are costly. In London, for example, penalty charges can cost up to £160, while if your car is towed it could cost an extra £280 to have it released from the car pound, plus a daily storage fee.

To cut congestion and improve air quality, some UK cities have introduced charges to drive into the city centre. If you work or live in London, you may need to pay a daily charge to drive in the city’s Ultra Low Emission Zone (ULEZ). And there are designated Clean Air Zones for cars in Bristol and Birmingham. You can avoid the charge if your car meets certain emissions standards – check here.

Also, you might have to pay bridge, tunnel or road tolls – for example, on the M6, the Mersey Tunnels and the Humber Bridge.

What standing costs do I need to consider?

Buying costs – loans and payment plans

If you pay for your car using a loan or a personal contract purchase plan, you’ll have monthly repayments to meet.

To see how affordable a car loan would be, try our car finance calculator.

Depreciation

As soon as you drive a new car off the forecourt it loses value. The amount cars depreciate varies between makes and models, but depreciation tends to be highest in the first few years of ownership.

The factors that can affect depreciation include:

• Mileage – the more miles on the clock, the less your car is worth

• Number of previous owners – the more owners, the more chance that someone wasn’t careful with the vehicle

• Warranty and service history – a car with active warranty still remaining and a complete service history will tend to have a higher resale value

• Make and model – some brands have a reputation for well-made, reliable cars, helping them keep their value

• Fuel economy – small, fuel-efficient cars tend to depreciate less as there’s always a market for them

• Safety – cars with good safety ratings can be in higher demand, keeping their price relatively high.

It’s a good idea to consider depreciation when choosing which car to buy, as it can make a difference when you come to sell or trade it in. But whatever you buy, you can help keep its value by:

• Looking after your car

• Repairing any scratches or dents

• Using manufacturer-recommended parts for repairs

• Keeping your mileage down by avoiding unnecessary journeys

• Getting your car serviced regularly and keeping your service record.

Car tax

How much you pay for your car tax will depend on a few factors, including your car’s engine and fuel type as well as the amount of CO2 it emits. Check out the latest tax rates on GOV.UK.

Be aware that electric cars are now subject to car tax.

If you find it hard to pay your vehicle tax in one go, you can pay monthly to spread the cost but you’ll pay a small premium on top for that.

If you know your car will be out of use for an extended period, you can formally declare it ‘off road’ by making a Statutory Off Road Notification (SORN). You won’t have to pay road tax, but the car cannot be driven at all or even parked by the roadside.

Insurance

It’s illegal to drive without insurance, but the level of cover you choose is up to you. Compare all three levels of car insurance to see which works out cheapest for you:

• Third-party is the minimum required by UK law and covers injury or damage to other people and vehicles

• Third-party fire and theft also covers fire damage and can pay out if your car is stolen

• Comprehensive cover offers the highest level of protection and covers damage to your own vehicle as well as all the above.

Check our tips for saving on car insurance.

Breakdown cover

Breakdown cover is an optional cost, but it may be worth it. It gives you roadside assistance if your vehicle breaks down, and you can add tyre replacement and battery replacement. Some policies now also cover repairs and labour up to a certain value.

How can I reduce my car’s running costs?

Here are some steps you can take to improve your car’s fuel efficiency and reduce running costs:

• Shop around for fuel – use apps that show you the cheapest places to fill up in your area

• Ensure your tyres are inflated to the right level

• Lighten your car’s weight, as extra load uses more fuel – regularly clean out your car, remove roof racks, cargo boxes and bike holders, and don’t fill your tank right up

• Don’t drive further than you have to – use your satnav so you don’t get lost or miss turnings

• Turn off the air conditioning, as using it can mean using more fuel

• Don’t idle your engine – unless you have a stop/start system, save fuel by turning off your engine if you’re going to be waiting a while

• Avoid driving at rush hour or on busy roads where possible

• Watch your speed – cars tend to be most efficient at 45-50 mph, while reducing your speed from 68mph to 50mph can cut fuel consumption by 20%.

As well as thinking about the car, think about your driving behaviour. Studies have found that driving aggressively – being heavy-footed on the brake and accelerator – can increase fuel consumption.

Shop around to save money

Whether it’s looking up local fuel prices or comparing quotes from a few different mechanics, shopping around could get you a better deal.

And remember, another way to save on your car’s running costs is to compare and switch insurance providers. You can compare car insurance quotes now and find the right deal for you.