Car Running Costs in the UK: The Average Costs of Owning a Car

Did you know it now costs 19% more to run a car than it did in 2020? 

With a car depreciating in value by 16% annually, there has been an increasing rate in the running costs, including insurance, car tax, fuel, maintenance, and repair, with the average running cost of over £3,000 yearly.

If you have a used vehicle, plan to buy a new car, or want to move to the UK, this guide will help you find some helpful ways to lower your car’s running costs and enhance its condition and performance.

The Average Cost of Running a Car in the UK

In 2024, car owners spent nearly £4,000 to run their cars, and the most expensive expense was fuel, although this is not a concern for electric vehicle drivers. Learn more about the cost of running an electric vehicle (EV).

A study by NimbleFins shows the average car running cost in the UK in 2024 and compares it to 2020.

The Running Costs of Owning a Car and How to Lower the Expenses

Although a vehicle owner doesn’t need to worry about the upfront cost any longer, the cost of running a vehicle can be expensive. Besides, the overall international crisis has led to an increase in the price of petrol and diesel.

Car Fuel Costs

The average fuel price is around £1200 for petrol and £ 1,550 for diesel cars. This was calculated based on an annual average mileage of 6,300 miles and 9,400 miles, respectively. However, the number of miles driven and the car’s fuel efficiency may differ.

The factors influencing the fuel cost per mile include the fuel cost per litre, fuel type (petrol or diesel), car fuel consumption, and driving style.

Though diesel is more expensive than petrol, you can get more miles on each gallon. If you drive many miles, diesel will be cheaper than petrol in the long run. If you want to buy a car, consider getting a new car with low fuel consumption.

Car Insurance Cost

In the UK, the average insurance cost is around £796 annually. With cheap car insurance, the least you can get starts from £500, but it may not cover features like the windscreen and mostly favoured owners or drivers of cheap cars. 

The amount you pay for car insurance may vary from person to person, depending on factors like the driver’s age, the type of car, driving record, location, and where you pack your car.

When fully comprehensive car insurance is in place, it helps to secure you from any financial burden due to any damages or injury following a crash or collision. 

Additionally,  driving uninsured in the UK can attract a fixed penalty of  £300 and six penalty points on your licence. 

Related: Penalties for Getting Caught Driving Without Insurance in the UK

Car Maintenance Costs

The average amount spent on servicing and repairing a car is £472 annually, including parts. These costs vary yearly since newer cars usually have little problems and are under warranty for a few years. Additionally, your car may need a major service, like every 12 months or 10,000 miles or have an expensive part broken and needs to be fixed.

MOT and Services

An aspect of the service required is the MOT, although this is not a service as such. MOT is the Ministry of Transport test to see if your car is road-legal or safe to drive. This is carried out if your vehicle is over three years old, and it is illegal for you to be charged more than £54.85 for an MOT. However, if any faults are discovered in your used car, the cost could rise to hundreds, even thousands of pounds.

Related: What is the Average Cost of a Full Car Service in the UK?

Car Tax (Vehicle Excise Duty)

When registering your car, you must pay car tax at a different rate based on the vehicle’s CO2 emissions every 6 or 12 months.

For a gasoline car registered post-Apirl 2017, the annual cost of tax renewal is £180. This is more for cars that attract higher value. An owner of an electric car with zero emission does not need to pay car tax until April 2025.

How to Reduce Your Car Running Costs?

Below are some simple tips for reducing your car’s running costs.

Keeping Insurance costs down

• Check and compare insurance costs online to compare prices by providers
• Choose a car that falls in a lower insurance category to attract a cheaper premium
• Pay for a yearly insurance policy instead of opting for the monthly direct debit.

Keeping the fuel costs down

• Discourage carrying heavy-weight goods to keep your car lighter and reduce the effort required for acceleration.
• Shop around for the cheapest fuel prices in your location.
• Don’t turn off the air conditioning at lower speeds to reduce fuel consumption.
• Keep your tyres inflated to enhance fuel efficiency.

Keeping maintenance costs down

• Ensure you service the vehicle at the recommended intervals
• Avoid skipping services.
• Ensure you use approved replacement parts by the manufacturer.
• Research the best price for car maintenance and repair services.

To keep parking and driving costs down

• Ensure you don’t violate any parking law and pay attention to where you park your car.
• Pay for a weekly or monthly pass to enjoy discounts and save money.
• Pay any parking fine as quickly as possible to enjoy a lower rate.
• Accelerate gradually, and don’t over-revv.
• Driving in the highest gear possible reduces the engine’s effort. Alternatively, you can drive a car with an automatic transmission.
• Slow down naturally and stop gradually.

How do you use the Car Running Cost Calculator?

With the car running costs calculator, you can verify the costs of owning and running your car between 1 and 5 years. These include depreciation, servicing and maintenance, car tax, insurance, and fuel costs.

The cost of owning and running a car in the UK is affected by several factors, including fuel consumption, car type, miles covered, driving style, and more. 

Before buying a new or used car in the UK, conduct an MPG check by reg number to help you make an informed decision about the car’s fuel consumption and maintenance, thus reducing the fuel cost of running it monthly and yearly.