The cost of owning a car goes well beyond the purchase price. After buying a new or used car, drivers need to budget for a range of ongoing expenses. Various things affect car ownership costs, such as the car’s make and model, personal circumstances, and market prices.
But with living costs rising and other global events impacting fuel availability, how has the cost of owning a car changed in the last year?
We’ve examined all the costs associated with car ownership to give an overview of how much you might need to pay to keep your car on the road.
The cost of owning a car goes well beyond the purchase price. After buying a new or used car, drivers need to budget for a range of ongoing expenses. Various things affect car ownership costs, such as the car’s make and model, personal circumstances, and market prices.
But with living costs rising and other global events impacting fuel availability, how has the cost of owning a car changed in the last year?
We’ve examined all the costs associated with car ownership to give an overview of how much you might need to pay to keep your car on the road.
The cost of petrol or diesel is one of the most regular costs drivers face, and it varies depending on local and country-wide factors. However, fuel-efficient cars can offset these costs, and the increasing availability of electric vehicles offers potential long-term savings on fuel.
We’ve examined the average price of 3 different fuel types and revealed the average fuel cost around the UK.
1. London: 155.1 pence per litre
London is the most expensive region for fuel, with an average price of 155.1 pence per litre. The cost of unleaded averaged 146.7 pence per litre, diesel at 154.8 pence per litre, and super unleaded is the highest at 163.9 pence per litre.
2. South East: 154.4 pence per litre
The South East follows closely, ranking second with average fuel costs of 154.4 pence per litre. Here, the average prices are slightly lower than in London, unleaded at 146.1 pence per litre, diesel at 154.6 pence per litre, and super unleaded at 162.6 pence per litre.
3. East of England: 153.6 pence per litre
The East of England ranks third, with the average fuel price at 153.6 pence per litre. In this region, unleaded costs an average of 145.9 pence per litre, diesel costs 153.7 pence per litre, and super unleaded costs 161.3 pence per litre.
Insurance premiums are influenced by the car type and driver’s history and are significantly affected by the driver’s age and location. Younger drivers often face higher rates due to their perceived risk, and premiums can vary widely between regions due to local risk factors and accident rates.
1. London: £1,227
London has the highest average car insurance premium, at £1,277 per year. This figure is due to the capital’s dense traffic, higher accident rates, and higher vehicle crime rates.
2. West Midlands: £986
The West Midlands has an average annual premium of £986. This region includes major cities such as Birmingham, which will influence the higher premium rates due to urban risks like higher traffic levels, theft, and vandalism.
3. North West: £917
The North West includes cities like Manchester and Liverpool, with an average premium of £917 per year. These cities also face urban risk factors that increase insurance costs.
Regular maintenance, such as oil changes, checking tyre pressure and tread depth, and monitoring fluid levels, is needed to keep a car in good working condition and prevent more costly repairs later.
Unexpected maintenance can also be expensive. Here, we’ve averaged the cost of 4 standard repairs in the UK’s largest towns and cities, including MOT, full service, aircon regas, and full service and MOT.
Luton has the highest average cost across all 4 services (£153.40), mainly due to the high full service and MOT (£265.02). This is followed by Southend-on-Sea, with an average of £152.50.
Parking prices often vary depending on location. Cities often charge high fees for parking spaces in residential and commercial zones.
Luton and Reading have the highest average daily parking price at £5.10. This could be due to a high demand or a limited supply of parking spaces in these areas.
Bradford in West Yorkshire follows with an average daily parking price of £4.80. Behind this are 4 cities with an average price of £4.70: London, Bristol, Milton Keynes and Swindon.
The cost of owning a car in the UK can vary based on various factors such as the type of car, its age, your driving habits, and where you live.
Here’s a breakdown of the everyday expenses associated with car ownership:
The price of a brand-new car depends on the make, model, and specifications. For example, for a VW Polo, the average new price is between £20,975 – £27,475[1], increasing to £29,670 – £40,455 for a Ford Focus estate[2]. For an SUV, this would be slightly more, with the Ford Kuga averaging £32,095 – £42,455[3].
The average cost of a used car is just over £16,000, but this figure varies depending on the vehicle’s age, mileage, manufacturer, and condition[4]. For more information, read our ‘What car can I afford?’ guide.
Cars typically lose between 10% and 15% of their value yearly[5]. The rate of depreciation depends on the vehicle’s make and model.
Annual insurance premiums depend on your age, driving history, location, and the car’s make and model.
Between January and March 2024, the average premium cost was £627, up 12% from the previous quarter[6].
The rate of road tax that you pay depends on your vehicle’s CO2 emissions. You can see the rates for the initial tax payment below, as of 1 April 2024, and check GOV.UK for the most up-to-date rates[7]. These rates apply to cars registered on or after 1 April 2017. For cars registered before this, you can see the rates for cars registered before this date here.
For the second year’s tax payment onwards, you can expect to pay:
The cost of an MOT test can vary, but the maximum amount that can be charged is £54.85 for a car and £29.65 for a standard motorcycle[8]. The UK government controls this, with the maximum fees set by the Driver and Vehicle Standards Agency (DVSA), a part of the Department for Transport. While some garages may offer MOT tests at lower prices, they cannot legally charge more than the DVSA-set maximum.
The average cost of a full car service is between £170 and £395, with an interim service costing around £110. Of course, if the service finds more problems that need to be fixed, this will add to the cost[9].
The average cost of a litre of unleaded fuel is 145.3 pence per litre and 153.9 per litre for diesel fuel. Over a year, this depends on mileage and fuel efficiency but averages around £1,095 for unleaded and £1,284 for diesel, based on average fuel economy[10].
The cost of breakdown cover varies depending on the provider, the level of cover you choose, and your vehicle’s make and model. Basic cover can start at around £60 a year, but more comprehensive policies may cost as much as £200 per year[11].
With many different suppliers and cover levels available, it’s important to compare options to find the best fit for your needs and vehicle.
If you take out a loan or car finance on your car, you will have to pay interest on the amount you borrow. The monthly cost of financing a car can vary significantly based on your circumstances.
For example, the UK’s most popular car, the Ford Fiesta, has an average used price of £3,960 – £22,035[12]. Taking the middle of this range (around £13,000) and assuming a repayment term of 5 years and APR of 30.7%, with a fair credit score, an average car finance agreement would have monthly payments of £400.75[13].
The cost of car servicing in the UK can vary based on the type of service, the vehicle’s size, and the garage’s location.
An interim service, typically recommended every 6 months or 6,000 miles, costs around £110[6]. This service includes basic checks and replacements, such as engine oil and oil filters, and topping up various fluids, such as brake, steering, and coolant fluids.
A full service, recommended every 12 months or 12,000 miles, costs between £170 and £395[6]. This complete service includes all the checks from an interim service plus extra checks and replacements, potentially covering up to 80 different car parts and systems.
A major service, typically carried out every 24 months or 24,000 miles, can cost around £210[6]. This includes everything in a full service plus extra inspections and replacements like brake fluid, spark plugs, and more thorough checks of the car’s major systems.
The average cost of an MOT test in the UK varies depending on the type of vehicle and the location. The maximum fee for a standard car (Class 4 vehicle) is £54.85, but the actual cost often ranges between £40 and £55. Many garages offer discounted prices, and it is not uncommon to find MOT tests for as low as £35 to £45[14].
The maximum fee for motorcycles is £29.65. Larger vehicles, such as vans up to 3,500 kg, can have an MOT fee of up to £58.60[14]. The cost can be higher in urban areas than in rural locations, so it’s worth checking multiple local garages for the best rates.
If your vehicle fails the MOT and needs a re-test, some garages may offer this service for free or at a reduced cost if the repairs are done at the same centre within a given timeframe (usually 10 working days).
The average cost of car insurance in the UK has significantly increased recently. As of 2024, the typical annual cost for comprehensive car insurance is about £627[3]. This marks a large rise from previous years, reflecting the overall trend of escalating insurance premiums.
The exact cost can vary widely based on several factors, including the driver’s age, location, driving history and the type of car insurance chosen. For example, younger drivers face the highest premiums, averaging £1,037 for comprehensive cover due to their higher risk profiles. Older drivers generally benefit from lower premiums, dropping to £383 for those aged 50-plus[15].
Regional differences also play a role. Drivers in London experience the highest average costs at around £1,277 annually, whereas those in other parts of the UK, such as the South West, pay significantly less, averaging about £599 per year[12].
The average cost of car repairs and maintenance in the UK varies significantly depending on the car model, age, and specific services needed.
The average annual cost for maintenance and repairs is about £150[16]. However, specific maintenance costs vary by brand.
Cars over 40 years old are free from vehicle tax each year starting on 1 January, offering further financial relief to owners of classic cars.
The money it costs to clean your car can vary depending on the type of service, the provider, and your location.
Prices can also vary based on the size of the car, with larger vehicles like SUVs and vans often costing more than standard saloons or hatchbacks. Some premium services may be more expensive depending on the products used and the cleaner’s expertise.
The cost of car park fees and parking tickets in the UK can vary widely depending on the location, time, and type of parking facility.
In city centres like London, Manchester, or Birmingham, hourly rates range from £1 to £6 or more. Daily rates vary from £15 to £50 depending on the location and demand[16].
At airports, short-term parking (e.g., for pick-ups and drop-offs) can cost between £3 to £7 for the first 15-30 minutes. Long-term parking can be upward of £10 per day, with discounts for pre-booking[17].
In our Airport Parking Report, we found the cost of weekly parking to be £180 at London Gatwick and £255.30 at Heathrow.
Parking fees at train stations typically range from £5 to £25 per day, with some differences based on the station’s size and location. You can read more about train station parking prices around the UK in our Train Station Parking Report.
Vehicle tax (car tax, road tax, or Vehicle Excise Duty – VED) in the UK varies depending on several factors, including the type of vehicle, its CO2 emissions, and its registration date. Here is a general overview of car tax bands:
The above applies to vehicles registered after 1 April 2017. Different bands apply for those registered between 1 March 2001 and 31 March 2017, which you can view on GOV.UK.
For those registered before 1 March 2001, rates depend on engine size, with those up to 1549cc paying £210 and those over 1549cc paying £345.
Fully electric vehicles are generally free from VED, while tax rates for motorcycles, vans, and other vehicles vary. For example, motorcycle tax rates depend on engine size and range from £25 to £117 per year[4].
Car depreciation is the reduction in a vehicle’s value over time due to age, mileage, wear and tear, and market conditions. It can significantly impact the amount you get if you sell or trade in your vehicle.
On average, a brand-new car loses 15 – 35% of its value in the first year. Over the next 3 years, it can lose 50% or more of its initial value[2].
Factors affecting depreciation include:
Online depreciation calculators and car valuation tools can give more specific estimates based on make, model, age, mileage, and condition.
Fuel prices have fluctuated due to various factors, such as crude oil prices, geopolitical events, and changes in demand and supply. There has been a notable increase in fuel prices in recent years due to the global energy crisis and supply chain disruptions.
Petrol and diesel prices peaked on 4 July 2022, reaching 191.6 and 199.2 pence per litre, respectively. Since then, they’ve fluctuated in price but had fallen to 144.3 and 150.1 pence per litre by July 2024[20].
Insurance premiums have generally risen over the past few years. According to the Association of British Insurers, car insurance was 25% more expensive on average in 2023 than the previous year[3].
Factors contributing to this include increased accident rates and higher repair costs due to advanced vehicle technologies.
Maintenance costs have increased by 40% between 2018 and 2022[21]. This rise is partly due to the higher complexity of modern vehicles, which often need specialised services and parts.
Inflation and supply chain issues have also increased spare parts and labour prices.
The prices of new and used cars have significantly risen. Supply chain disruptions caused by the COVID pandemic, semiconductor shortages, and increased demand have driven up the costs of new vehicles. Used car prices have also surged due to the high demand and limited supply[22].
The cost of owning a new car versus a used car can vary significantly based on various factors, including depreciation, maintenance, insurance, financing, and fuel efficiency.
When considering the total cost of ownership over a typical 5-year period, used cars generally offer lower ownership costs due to reduced depreciation, lower insurance premiums, and lower purchase prices.
New vehicles offer a warranty, lower initial maintenance costs, and the latest technology and safety features.
The ownership costs of petrol and diesel cars can be compared by looking at several key factors: purchase price, fuel costs, maintenance and servicing, insurance, and resale value.
The total cost of ownership for petrol versus diesel cars varies based on your driving habits and personal situation. Diesel cars can be cheaper for high-mileage drivers because of their fuel efficiency and better resale value.
Due to its lower price, maintenance costs, and fewer emissions restrictions, a petrol car might be cheaper for lower-mileage drivers or those primarily driving in urban areas.
When deciding between petrol and diesel cars, it’s essential to think about your specific driving needs and future trends in the automotive market.
The ownership costs of electric vehicles (EVs) can vary widely based on factors such as the type of vehicle, local electricity prices, and government incentives.
While EVs have a higher initial cost, their lower running costs, government incentives, and exemptions from certain taxes and charges can make them cheaper.
Potential owners should carefully consider their driving habits, charging options, and local incentives to make a well-informed decision.
Paul Green, Moneybarn’s motoring expert, has almost 30 years of experience in the automotive industry. He uses this knowledge to share ways motorists could cut the monthly cost of car ownership.
The data in this study is accurate as of 22 July 2024.
How much does it cost to run a car around the UK?
Additional data was taken from the following sources:
The cost of petrol or diesel is one of the most regular costs drivers face, and it varies depending on local and country-wide factors. However, fuel-efficient cars can offset these costs, and the increasing availability of electric vehicles offers potential long-term savings on fuel.
We’ve examined the average price of 3 different fuel types and revealed the average fuel cost around the UK.
1. London: 155.1 pence per litre
London is the most expensive region for fuel, with an average price of 155.1 pence per litre. The cost of unleaded averaged 146.7 pence per litre, diesel at 154.8 pence per litre, and super unleaded is the highest at 163.9 pence per litre.
2. South East: 154.4 pence per litre
The South East follows closely, ranking second with average fuel costs of 154.4 pence per litre. Here, the average prices are slightly lower than in London, unleaded at 146.1 pence per litre, diesel at 154.6 pence per litre, and super unleaded at 162.6 pence per litre.
3. East of England: 153.6 pence per litre
The East of England ranks third, with the average fuel price at 153.6 pence per litre. In this region, unleaded costs an average of 145.9 pence per litre, diesel costs 153.7 pence per litre, and super unleaded costs 161.3 pence per litre.
Insurance premiums are influenced by the car type and driver’s history and are significantly affected by the driver’s age and location. Younger drivers often face higher rates due to their perceived risk, and premiums can vary widely between regions due to local risk factors and accident rates.
1. London: £1,227
London has the highest average car insurance premium, at £1,277 per year. This figure is due to the capital’s dense traffic, higher accident rates, and higher vehicle crime rates.
2. West Midlands: £986
The West Midlands has an average annual premium of £986. This region includes major cities such as Birmingham, which will influence the higher premium rates due to urban risks like higher traffic levels, theft, and vandalism.
3. North West: £917
The North West includes cities like Manchester and Liverpool, with an average premium of £917 per year. These cities also face urban risk factors that increase insurance costs.
Regular maintenance, such as oil changes, checking tyre pressure and tread depth, and monitoring fluid levels, is needed to keep a car in good working condition and prevent more costly repairs later.
Unexpected maintenance can also be expensive. Here, we’ve averaged the cost of 4 standard repairs in the UK’s largest towns and cities, including MOT, full service, aircon regas, and full service and MOT.
Luton has the highest average cost across all 4 services (£153.40), mainly due to the high full service and MOT (£265.02). This is followed by Southend-on-Sea, with an average of £152.50.
Parking prices often vary depending on location. Cities often charge high fees for parking spaces in residential and commercial zones.
Luton and Reading have the highest average daily parking price at £5.10. This could be due to a high demand or a limited supply of parking spaces in these areas.
Bradford in West Yorkshire follows with an average daily parking price of £4.80. Behind this are 4 cities with an average price of £4.70: London, Bristol, Milton Keynes and Swindon.
The cost of owning a car in the UK can vary based on various factors such as the type of car, its age, your driving habits, and where you live.
Here’s a breakdown of the everyday expenses associated with car ownership:
The price of a brand-new car depends on the make, model, and specifications. For example, for a VW Polo, the average new price is between £20,975 – £27,475[1], increasing to £29,670 – £40,455 for a Ford Focus estate[2]. For an SUV, this would be slightly more, with the Ford Kuga averaging £32,095 – £42,455[3].
The average cost of a used car is just over £16,000, but this figure varies depending on the vehicle’s age, mileage, manufacturer, and condition[4]. For more information, read our ‘What car can I afford?’ guide.
Cars typically lose between 10% and 15% of their value yearly[5]. The rate of depreciation depends on the vehicle’s make and model.
Annual insurance premiums depend on your age, driving history, location, and the car’s make and model.
Between January and March 2024, the average premium cost was £627, up 12% from the previous quarter[6].
The rate of road tax that you pay depends on your vehicle’s CO2 emissions. You can see the rates for the initial tax payment below, as of 1 April 2024, and check GOV.UK for the most up-to-date rates[7]. These rates apply to cars registered on or after 1 April 2017. For cars registered before this, you can see the rates for cars registered before this date here.
The car tax band prices listed in the following tables are for petrol, diesel, and alternative fuel cars. Diesel cars tested to Real Driving Emissions 2 (RDE2) standards* fall into the same category as petrol cars (TC48). All other diesel cars tested to RDE standards** sit in a higher tax class (TC49). Alternative fuels are hydrogen fuel cells, liquid petroleum gas (LPG) and condensed natural gas (CNG).
CO2 emissions (g/km) | Petrol and diesel cars* | Diesel cars** | Alternative fuel cars | 0 | £0 | £0 | £0 |
---|---|---|---|
1-50 | £10 | £30 | £0 |
51-75 | £30 | £135 | £20 |
76-90 | £135 | £175 | £125 |
91-100 | £175 | £195 | £165 |
101-110 | £195 | £220 | £185 |
111-130 | £220 | £270 | £210 |
131-150 | £270 | £680 | £260 |
151-170 | £680 | £1,095 | £670 |
171-190 | £1,095 | £1,650 | £1,085 |
191-225 | £1,650 | £2,340 | £1,640 |
226-255 | £2,340 | £2,745 | £2,330 |
Over 255 | £2,745 | £2,745 | £2,735 |
For the second year’s tax payment onwards, you can expect to pay:
Tax class | Single 12 month payment | Single 12 month payment by Direct Debit | Total of 12 monthly payments by Direct Debit | Single 6 month payment | Single 6 month payment by Direct Debit | Petrol and diesel car | £190 | £190 | £199.50 | £104.50 | £99.75 |
---|---|---|---|---|---|
Electric | £0 | N/A | N/A | £0 | N/A |
Alternative fuel car | £180 | £180 | £189 | £99 | £94.50 |
The cost of an MOT test can vary, but the maximum amount that can be charged is £54.85 for a car and £29.65 for a standard motorcycle[8]. The UK government controls this, with the maximum fees set by the Driver and Vehicle Standards Agency (DVSA), a part of the Department for Transport. While some garages may offer MOT tests at lower prices, they cannot legally charge more than the DVSA-set maximum.
The average cost of a full car service is between £170 and £395, with an interim service costing around £110. Of course, if the service finds more problems that need to be fixed, this will add to the cost[9].
The average cost of a litre of unleaded fuel is 145.3 pence per litre and 153.9 per litre for diesel fuel. Over a year, this depends on mileage and fuel efficiency but averages around £1,095 for unleaded and £1,284 for diesel, based on average fuel economy[10].
The cost of breakdown cover varies depending on the provider, the level of cover you choose, and your vehicle’s make and model. Basic cover can start at around £60 a year, but more comprehensive policies may cost as much as £200 per year[11].
With many different suppliers and cover levels available, it’s important to compare options to find the best fit for your needs and vehicle.
If you take out a loan or car finance on your car, you will have to pay interest on the amount you borrow. The monthly cost of financing a car can vary significantly based on your circumstances.
For example, the UK’s most popular car, the Ford Fiesta, has an average used price of £3,960 – £22,035[12]. Taking the middle of this range (around £13,000) and assuming a repayment term of 5 years and APR of 30.7%, with a fair credit score, an average car finance agreement would have monthly payments of £400.75[13].
The cost of car servicing in the UK can vary based on the type of service, the vehicle’s size, and the garage’s location.
An interim service, typically recommended every 6 months or 6,000 miles, costs around £110[6]. This service includes basic checks and replacements, such as engine oil and oil filters, and topping up various fluids, such as brake, steering, and coolant fluids.
A full service, recommended every 12 months or 12,000 miles, costs between £170 and £395[6]. This complete service includes all the checks from an interim service plus extra checks and replacements, potentially covering up to 80 different car parts and systems.
A major service, typically carried out every 24 months or 24,000 miles, can cost around £210[6]. This includes everything in a full service plus extra inspections and replacements like brake fluid, spark plugs, and more thorough checks of the car’s major systems.
The average cost of an MOT test in the UK varies depending on the type of vehicle and the location. The maximum fee for a standard car (Class 4 vehicle) is £54.85, but the actual cost often ranges between £40 and £55. Many garages offer discounted prices, and it is not uncommon to find MOT tests for as low as £35 to £45[14].
The maximum fee for motorcycles is £29.65. Larger vehicles, such as vans up to 3,500 kg, can have an MOT fee of up to £58.60[14]. The cost can be higher in urban areas than in rural locations, so it’s worth checking multiple local garages for the best rates.
If your vehicle fails the MOT and needs a re-test, some garages may offer this service for free or at a reduced cost if the repairs are done at the same centre within a given timeframe (usually 10 working days).
The average cost of car insurance in the UK has significantly increased recently. As of 2024, the typical annual cost for comprehensive car insurance is about £627[3]. This marks a large rise from previous years, reflecting the overall trend of escalating insurance premiums.
The exact cost can vary widely based on several factors, including the driver’s age, location, driving history and the type of car insurance chosen. For example, younger drivers face the highest premiums, averaging £1,037 for comprehensive cover due to their higher risk profiles. Older drivers generally benefit from lower premiums, dropping to £383 for those aged 50-plus[15].
Regional differences also play a role. Drivers in London experience the highest average costs at around £1,277 annually, whereas those in other parts of the UK, such as the South West, pay significantly less, averaging about £599 per year[12].
The average cost of car repairs and maintenance in the UK varies significantly depending on the car model, age, and specific services needed.
The average annual cost for maintenance and repairs is about £150[16]. However, specific maintenance costs vary by brand.
Cars over 40 years old are free from vehicle tax each year starting on 1 January, offering further financial relief to owners of classic cars.
The money it costs to clean your car can vary depending on the type of service, the provider, and your location.
Prices can also vary based on the size of the car, with larger vehicles like SUVs and vans often costing more than standard saloons or hatchbacks. Some premium services may be more expensive depending on the products used and the cleaner’s expertise.
The cost of car park fees and parking tickets in the UK can vary widely depending on the location, time, and type of parking facility.
In city centres like London, Manchester, or Birmingham, hourly rates range from £1 to £6 or more. Daily rates vary from £15 to £50 depending on the location and demand[16].
At airports, short-term parking (e.g., for pick-ups and drop-offs) can cost between £3 to £7 for the first 15-30 minutes. Long-term parking can be upward of £10 per day, with discounts for pre-booking[17].
In our Airport Parking Report, we found the cost of weekly parking to be £180 at London Gatwick and £255.30 at Heathrow.
Parking fees at train stations typically range from £5 to £25 per day, with some differences based on the station’s size and location. You can read more about train station parking prices around the UK in our Train Station Parking Report.
Vehicle tax (car tax, road tax, or Vehicle Excise Duty – VED) in the UK varies depending on several factors, including the type of vehicle, its CO2 emissions, and its registration date.
The car tax band prices listed in the following tables are for petrol, diesel, and alternative fuel cars. Diesel cars tested to Real Driving Emissions 2 (RDE2) standards* fall into the same category as petrol cars (TC48). All other diesel cars tested to RDE standards** sit in a higher tax class (TC49). Alternative fuels are hydrogen fuel cells, liquid petroleum gas (LPG) and condensed natural gas (CNG).
Here is a general overview of car tax bands:
CO2 emissions (g/km) | Petrol and diesel cars* | Diesel cars** | Alternative fuel cars | 0 | £0 | £0 | £0 |
---|---|---|---|
1-50 | £10 | £30 | £0 |
51-75 | £30 | £135 | £20 |
76-90 | £135 | £175 | £125 |
91-100 | £175 | £195 | £165 |
101-110 | £195 | £220 | £185 |
111-130 | £220 | £270 | £210 |
131-150 | £270 | £680 | £260 |
151-170 | £680 | £1,095 | £670 |
171-190 | £1,095 | £1,650 | £1,085 |
191-225 | £1,650 | £2,340 | £1,640 |
226-255 | £2,340 | £2,745 | £2,330 |
Over 255 | £2,745 | £2,745 | £2,735 |
Tax class | Single 12 month payment | Single 12 month payment by Direct Debit | Total of 12 monthly payments by Direct Debit | Single 6 month payment | Single 6 month payment by Direct Debit | Petrol and diesel car | £190 | £190 | £199.50 | £104.50 | £99.75 |
---|---|---|---|---|---|
Electric | £0 | N/A | N/A | £0 | N/A |
Alternative fuel car | £180 | £180 | £189 | £99 | £94.50 |
The above applies to vehicles registered after 1 April 2017. Different bands apply for those registered between 1 March 2001 and 31 March 2017, which you can view on GOV.UK.
For those registered before 1 March 2001, rates depend on engine size, with those up to 1549cc paying £210 and those over 1549cc paying £345.
Fully electric vehicles are generally free from VED, while tax rates for motorcycles, vans, and other vehicles vary. For example, motorcycle tax rates depend on engine size and range from £25 to £117 per year[4].
Car depreciation is the reduction in a vehicle’s value over time due to age, mileage, wear and tear, and market conditions. It can significantly impact the amount you get if you sell or trade in your vehicle.
On average, a brand-new car loses 15 – 35% of its value in the first year. Over the next 3 years, it can lose 50% or more of its initial value[2].
Factors affecting depreciation include:
Online depreciation calculators and car valuation tools can give more specific estimates based on make, model, age, mileage, and condition.
Fuel prices have fluctuated due to various factors, such as crude oil prices, geopolitical events, and changes in demand and supply. There has been a notable increase in fuel prices in recent years due to the global energy crisis and supply chain disruptions.
Petrol and diesel prices peaked on 4 July 2022, reaching 191.6 and 199.2 pence per litre, respectively. Since then, they’ve fluctuated in price but had fallen to 144.3 and 150.1 pence per litre by July 2024[20].
Insurance premiums have generally risen over the past few years. According to the Association of British Insurers, car insurance was 25% more expensive on average in 2023 than the previous year[3].
Factors contributing to this include increased accident rates and higher repair costs due to advanced vehicle technologies.
Maintenance costs have increased by 40% between 2018 and 2022[21]. This rise is partly due to the higher complexity of modern vehicles, which often need specialised services and parts.
Inflation and supply chain issues have also increased spare parts and labour prices.
The prices of new and used cars have significantly risen. Supply chain disruptions caused by the COVID pandemic, semiconductor shortages, and increased demand have driven up the costs of new vehicles. Used car prices have also surged due to the high demand and limited supply[22].
The cost of owning a new car versus a used car can vary significantly based on various factors, including depreciation, maintenance, insurance, financing, and fuel efficiency.
When considering the total cost of ownership over a typical 5-year period, used cars generally offer lower ownership costs due to reduced depreciation, lower insurance premiums, and lower purchase prices.
New vehicles offer a warranty, lower initial maintenance costs, and the latest technology and safety features.
The ownership costs of petrol and diesel cars can be compared by looking at several key factors: purchase price, fuel costs, maintenance and servicing, insurance, and resale value.
The total cost of ownership for petrol versus diesel cars varies based on your driving habits and personal situation. Diesel cars can be cheaper for high-mileage drivers because of their fuel efficiency and better resale value.
Due to its lower price, maintenance costs, and fewer emissions restrictions, a petrol car might be cheaper for lower-mileage drivers or those primarily driving in urban areas.
When deciding between petrol and diesel cars, it’s essential to think about your specific driving needs and future trends in the automotive market.
The ownership costs of electric vehicles (EVs) can vary widely based on factors such as the type of vehicle, local electricity prices, and government incentives.
While EVs have a higher initial cost, their lower running costs, government incentives, and exemptions from certain taxes and charges can make them cheaper.
Potential owners should carefully consider their driving habits, charging options, and local incentives to make a well-informed decision.
Paul Green, Moneybarn’s motoring expert, has almost 30 years of experience in the automotive industry.
He uses this knowledge to share ways motorists could cut the monthly cost of car ownership.
The data in this study is accurate as of 22 July 2024.
How much does it cost to run a car around the UK?
Additional data was taken from the following sources:
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Moneybarn No. 1 Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702780)