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What's the Average Cost of Running a Car in the UK?
UK car owners spend over £3,500 to run their cars each year. Besides the purchase price, the biggest expenses of car ownership are petrol or diesel (£1,400+ a year estimated now due to rising petrol and diesel prices), motor insurance (£561 a year), and repairs and servicing (£273 a year). In addition, road tax, parking fees & permits, driving lessons, car clubs, fines and other upkeep expenses cost an additional £259 a year per vehicle.
|Average Car Running Costs UK|
|Purchase/Depreciation per year^||£1,104|
|Petrol and Diesel||£1,400|
|Repairs and Servicing||£273|
|Motor vehicle road tax||£141|
|Parking fees, tolls, and permits (excluding motoring fines)||£44|
|Garage rent, other costs (excluding fines), car washing, etc.||£31|
|Motoring organisation subscription (eg AA and RAC)||£18|
|Anti-freeze, battery water, cleaning materials||£9|
|Annual running costs for a car||£3,580|
How do costs differ if you drive an electric car? Purchase prices of EVs are generally higher, and depreciation rates are also higher (that is, we think EVs depreciate or lose value faster). For example, our recent research showed that the average purchase price of the 10 cheapest EVs is around £29,000 (the cheapest vehicle being the Smart EQ fortwo coupe, which starts from £22,225). So people driving an EV could have slightly higher lease or depreciation costs compared to what they could pay with a cheap petrol car (e.g. VW Polo and Ford Fiesta models starts from under £18,000).
In contrast, fuel costs less with an electric car—even with high electricity prices. Our research shows that the average cost to fuel a mile of driving in an EV is around 9p/mile, which is about half the cost of petrol for an ICE car (~18p/mile).
Note, these figures are averages across all drivers. In cases where a cost is essentially mandatory, like paying for the vehicle, servicing, petrol, tax and insurance, the averages mentioned above should be pretty reliable indicators of cost for a typical driver; but for expenses that are highly optional and only taken by a small proportion of drivers, like motoring organisations, driving lessons, motoring fines, etc., the average costs listed above are dragged down by low take-up rates—that means if you spend on these items, you will most certainly spend a lot more than the "average" listed for this line item. For example, if you pay a motoring fine, it will certainly cost more than £4!
If you're reading this because you're an employer or employee thinking about per-mile expense reimbursements for work journeys, please read more about this topic here.
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.
Resources such as AutoTrader and Desperate Seller can help those searching for cheap cars for sale.
Car Petrol Costs
For the typical car owner, car fuel costs average out around £1,400 a year (£1,200 for a typical petrol car and £1,550 for a typical diesel, assuming average mileage for each type of 6,300 and 9,400 miles per year, respectively). 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 now over £561 a year. Even if you buy cheap car insurance, nowadays our tests have shown that not many policies start from under £500. However, prices can vary significantly from person to person and car to car. 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). If price and customer service are both priorities for you, check out our list of the Top 10 Best-Rated Cheap Car Insurance Companies.
Car Service Costs
While the average amount spent to service and repair a car each year is £270, this amount can also be quite variable from year to year—and this number will certainly rise due to inflationary pressures. 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.
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 1.18 (32,869,900 cars in the UK divided by 27.8 million households). From there, we were able to see how much people actually spend on their cars each year. We also used our own generated data where we had more up-to-date information e.g. regarding the cost of car insurance.