Motor Insurance

Average Cost to Run a Car UK 2020

How much does it cost to own a car in the UK? We've analysed real spending data to find out how much people actually spend to run their cars each year.

What's the Average Cost of Running a Car in the UK?

UK car owners spend over £3,100 to run their cars each year. Besides the purchase price, the biggest expenses of car ownership are petrol or diesel (£904 a year), motor insurance (£470 a year), and repairs and servicing (£279 a year). In addition, road tax, parking fees & permits, driving lessons, car clubs, fines and other upkeep expenses cost an additional £279 a year per vehicle.

Average Car Running Costs UK
Purchase/Depreciation per year^£1,175
Petrol and Diesel£904
Car Insurance£470
Repairs and Servicing£279
Motor vehicle road tax£144
Parking fees, tolls and permits£48
Garage rent, car washing, etc.£35
Motoring organisation subscription (e.g., AA and RAC)£30
Driving lessons£13
Anti-freeze, battery water and cleaning materials£4
Motoring fines£4
Annual running costs for a car£3,107

Cost of Cars in the UK

To buy a car in the UK, you can spend anywhere from a few thousand pounds for a used car to tens of thousands of pounds on a new car, or more! The most popular cars in the UK cost in the region of £12,000 to £36,000 to buy new (starting on-the-road prices).

For example, the Ford Fiesta starts from around £18,000. Some cars cost a bit more, however, with the ever-popular VW Golf starting in the mid-£30,000s. Budget-conscious households can save by purchasing a gently-used car and staying away from the trend of buying more expensive cars.

chart showing starting OTR prices of cars in the UK
Cost to buy a car in the UK

Car Petrol Costs

For the typical car owner, car fuel costs average out around £1,000 a year. This depends primarily on the number of miles you drive and the fuel efficiency of your car.

Cost of Car Insurance

The average cost of car insurance in the UK is just under £500 a year. However, prices can vary significantly from person to person. Some of the factors that have the largest impact on the price you'll pay for car insurance are your age, the car you drive, your driving record, where you live and where you keep your car at night (e.g., on the road or in a locked garage).

Car Service Costs

While the average amount spent to service and repair a car each year is £279, this amount can also be quite variable from year to year. For example, newer cars typically have fewer problems and are under warranty for the first few years, limiting the amount spent on service and repairs compared to older cars. Also, repair and service costs can be quite lumpy from year to year. For example, you'll spend more in a year when your car requires a major service (e.g., every 24 months or 20,000 miles) or if an expensive part breaks on your car.

FAQs

The cost to drive a car is around 41p per mile, which we calculate by dividing average annual car running costs of £3,100 by average car mileage of 7,600 miles per year. Costs can vary depending on factors like the value of the car, the insurance rate and car fuel efficiency.
For a typical car owner, the cost for every 1,000 of driving is around £408 (since the running costs per mile are 41p).
The average cost of owning a car is around £258 per month in the UK, given average annual costs to own a car.
The average cost of car insurance in the UK is £468 a year, or around £40 a month.
The average cost of a car UK ranges from £12,000 to £28,000, depending primarily on the size, spec and car make and model.
The average household spends £1,400 a year on car purchases and financing, representing 4.7% of their annual family budget. If it suits your financial situation, you can use this figure as a guide for your own car purchase.
Latest figures show the average cost of gas in the UK is 126p pence per litre for petrol and 132 pence per litre for diesel.
We calculate that there are 1.19 cars per household in the UK.

Methodology

To determine how much it costs to own a car in the UK, we analysed family spending data from the Office Office for National Statistics. First, we gathered car-related expenditures for a typical household, such as money spent on purchasing a car, car insurance, fuel, taxes, servicing, driving lessons and other car upkeep costs.

Since this data was per household, we had to convert it to a per car basis by dividing the cost data by the average number of cars per household. We calculate that the average number of cars per household is 1.19 (32,973,000 cars in the UK divided by 27.6 million households). From there, we were able to see how much people actually spend on their cars each year.

Erin Yurday

Erin Yurday is the CEO of NimbleFins. Prior to founding NimbleFins, she worked as an investment professional at TD Securities and a risk arbitrage hedge fund, and later as the finance expert in the case writing team at Stanford University's Graduate School of Business.

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