How to Determine the True Cost of Running Your Car

How to Determine the True Cost of Running Your Car

by Rebecca Hall on 28 Aug, 2012

There are many costs associated with driving a car in the U.K. If you own a vehicle, it is important to take these expenses into consideration so that you can work them into your budget or determine whether it’s worth it to drive your car everywhere you go. Running costs can vary greatly depending on many factors, but in general, you can expect to pay for the following:

• Fuel

Most cars won’t run without fuel, so petrol costs are the first thing you should think about when calculating the cost of owning your vehicle. To determine how much your fuel costs each year, divide the price of fuel by your car’s gas mileage, and then multiply that amount by the number of miles you drive in a year. The average person in the U.K. drives about 12,000 miles annually, so use that as a basis if you aren’t sure about your mileage.

• Car insurance

You cannot drive a car on U.K. roads without having at least third party car insurance. The price of this can vary tremendously, so make sure to get a free car insurance quote from many different companies to determine the best policy for you. Many companies will offer an online car insurance quote , which makes it easy to find the cheapest price and calculate your car insurance costs.


In the U.K., it is illegal to drive any car that is more than three years old without a current MOT certificate. You can not renew your road tax if you don’t have this certificate, and you may be fined as much as £1000 if you are caught driving without it. This usually costs about 50 pounds a year, but it can be more if your car needs additional work in order to pass the MOT test.

• Road taxes

Road taxes are another expense that is required of every vehicle in the U.K. These taxes are around £100 a year for most people, but those who own larger, less fuel-efficient cars pay more. Avoiding these taxes is not possible because the DVLA performs monthly checks to ensure that they are paid, and the owners of untaxed cars are issued a fine.

• Servicing

Most cars need to be serviced regularly in order to run optimally, and if your car is older, you should plan on a major repair at least once a year. Servicing costs can be anywhere from nothing to hundreds or even thousands of pounds, but £100 a year is a good ballpark figure for most situations.

• Depreciation

Your car decreases in value every time you drive it, and this should be factored into your running costs as well. To determine your car’s depreciation, subtract the current value of your car from the price that you bought it for, and then divide the result by the number of years you have owned the vehicle.

• Miscellaneous expenses

When you drive a car, you can expect to buy things such as oil, washer fluid, tires, brake pads and fuses. It is impossible to determine what these things will cost you ahead of time, but £150 or more is not uncommon for many vehicles.

About the Author

Rebecca Hall

Rebecca Hall worked as an independent mortgage adviser for 10 years before turning to financial journalism full time. She has strong links to the CAB advising families on mortgage refinancing.