The price on the windscreen is only part of what a car costs. Fuel, insurance, road tax, servicing, repairs and depreciation all add up, and together they often cost more each year than buyers expect.
Running a typical UK car commonly costs somewhere around £2,000 to £3,500 a year before finance, with fuel, insurance and depreciation usually the three biggest items. Your own figure depends heavily on mileage, the car and your insurance.
Fuel or charging is usually the cost that varies most with how far you drive. Insurance, road tax (Vehicle Excise Duty) and a yearly service are broadly fixed whether the car sits on the drive or covers big miles.
Beyond those, budget for the MOT once the car is over three years old, tyres, and the occasional repair. Setting aside a small monthly amount for unexpected bills stops them becoming a shock.
Depreciation — the value a car loses over time — is often the single biggest cost of ownership, even though you never see a bill for it. A new car can lose a large share of its value in the first three years.
Buying a car that is a few years old lets someone else absorb the steepest depreciation, which is why used cars can be better value even after allowing for slightly higher repair costs.
Comparing insurance at renewal rather than auto-renewing is one of the easiest savings. Keeping up with servicing protects against larger repair bills later.
Driving style, tyre pressures and choosing an efficient car for your mileage all affect fuel costs. For higher-mileage drivers, an electric car can cut the cost per mile if home charging is available.
At around 5,000 miles a year, fixed costs like insurance and tax dominate, so a cheap-to-insure car matters more than fuel economy.
At around 10,000 miles a year, fuel becomes a major cost and depreciation on a newer car is significant, so total cost per mile is worth checking before buying.
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Use calculatorOver a few years of ownership it is often depreciation, followed by fuel and insurance. Day to day, fuel and insurance feel like the biggest costs.
Many drivers find £150 to £300 a month covers running costs before any finance payment, but it varies widely with mileage, the car and insurance.
Often yes on fuel and servicing, especially with home charging, but the higher purchase price and depreciation need to be weighed up. Our electric vs petrol comparison goes into detail.
Shop around for insurance at renewal, keep up with servicing, check tyre pressures and pick a car suited to your mileage.