The cost of running a car

By Joe Marczynski
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Car running costs can be hefty but there are ways to reduce how much you spend. Our guide tells you how, including tips.

So, you’ve committed to a fair and manageable finance package and driven off into the sunset in your shiny new car. All those big, scary costs are shrinking in the rear-view mirror, right?

Wrong.

The cost of your car and any finance package you agreed to are just the tip of the iceberg when it comes to car running costs. Rather, there are dozens more hidden under the surface, varying from a few pounds every few days to several hundred each year.

Knowing what each of these costs, however, will help prepare you and equip you to pay for them with as minimal a headache as possible.

We’ll start with the big boys!

The biggest costs

Tax

For cars registered pre-April 2017, your car’s V5C registration document states how much CO2 emissions your car emits, and then your car tax is based on this figure.

Higher emissions mean a higher rate of tax. For cars registered after April 2017 and with a list price of under £40,000, the first-year rate will be based on these CO2 figures, while a flat, standard rate of £140 will apply unless the car is emission free. Cars over £40,000 at list price face a further £310 charge per year.

You can pay your tax in one lump sum, or more manageably, by direct debit every month or biannually. Diesel cars commonly pay less tax than petrol cars because they emit less CO2.

Fuel

Avoiding motorway petrol stations and knowing the stations in your local area that often have the best rates are important factors when it comes to fuel costs.

How much you spend on fuel depends on four things

- The fuel price

- The fuel type

- Your car’s fuel consumption

- How you drive

While diesel cars emit less CO2, potentially saving money on tax, diesel costs more than petrol. However, you get more miles to the gallon from it, meaning you’ll need to fill up less often.

MOT and Servicing

It is a legal requirement that all cars have an MOT (which stands for Ministry of Transport) test once per year.

Try and schedule in a yearly service just ahead of your MOT, as it will increase your chances of passing. If the car is brand new, you’re in luck; it will only need an MOT test by the third anniversary of its registration. Check when your car’s MOT expires here. Be careful; driving without an MOT certificate can get you a court summons and a fine of up to £1,000.

Car insurance

By law you must have third party car insurance, but there are two other forms of cover to choose from; third party fire and theft and fully comprehensive.

- Third party insurance pays out if the covered person causes damage to another person’s property, costs for any injuries you might cause another person involved.

- Third party fire and theft insurance covers the same as the above plus if your car is stolen or burnt.

- Fully comprehensive insurance is, as the name suggests, far more comprehensive. It covers damage to both your vehicle and to other people’s vehicles, plus fire, theft and accidents.

Breakdown cover

It might be a technically unnecessary cost, but you’d be foolhardy to not invest in breakdown cover. You simply can’t predict the future, and if your car breaks down without cover, the recovery fees could be phenomenally high.

The other costs

Unexpected maintenance

A flat tyre thanks to a rogue piece of glass on the motorway? It might be unexpected – but that doesn’t mean it can be ignored. It’s pretty much inevitable that at least one or two unexpected car maintenance costs will crop up each year.

Fines

Parked where you shouldn’t have? Lost concentration on your speed and been caught by a camera? Driving fines add to your costs, particularly if you don’t pay them immediately and the amount owed increases.

Congestion charges, parking permits and cleaning

Technically, these charges are optional. All of these can be avoided if you don’t drive anywhere with congestion charges, have free on-street parking or driveway parking and clean your car yourself.

The average cost of running a car

While it would be great to give a definitive cost of running a car, it simply isn’t possible. There are so many variables in place, from loan providers to areas of the country to car specification. That’s why, if you try to search for the average cost of running a car you will turn up dozens of different, contradictory answers.

Instead, the most useful thing you can do is use a car cost calculator to figure out your own individual yearly car costs. ?

Reducing your costs

Living in a low crime area and being an older person with a few decades of experience and no-claims bonuses are two examples of ways to bring down your car running costs. Unfortunately, they’re also examples of things you don’t have much control over.

Here have some things you can do to reduce the running costs of your car:

Weekly costs

Don’t nip into the first petrol station you come across when you need to fill up; keep your eyes open and figure out the cheapest place in the area.

Fill up more when you find a great price and less when the prices are temporarily steeper, and avoid motorway petrol stations at all costs. The mark-up here is almost always obscene, taking advantage of drivers who need petrol urgently.

Monthly costs

Monthly, keep on top of any parking or speeding fines and pay them off before they increase, and monitor rises in car parking costs. If you like to get your car washed, find the most affordable option in your area, shopping around just as with fuel. Saving £10 a month on cheaper fuel, car parks and car washes might not sound like a lot at the time, but that’s £120 extra in the bank this time next year.

Yearly costs

Yearly costs of running a car are the ones you need to invest the most time in securing low. This goes for things like insurance, tax and servicing.

Once you’ve picked your car there isn’t a great deal you can do about the tax, but the cost of insurance can vary by hundreds from company to company – to find the best type of insurance for you, try our car insurance comparison tool.

Don’t be fooled into thinking that a renewal rate is the best deal you’re going to get. Loyal customer or not, you may well find moving between providers puts more money in your pocket. ?

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