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Blog / Buying Guides / Car Buyer's Guide - Car Running Costs

Written by : sshields

Published on:: 11/11/2015

Car Buyer's Guide - Car Running Costs

When people think about buying a car, they can often forget just how big an investment it is.

Unfortunately it's not just a case of saving up enough to cover the one-off cost of actually purchasing the car - the costs mount up from day to day.

So, make sure you're fully prepared for ownership by researching & budgeting for the main costs of running a car.


A legal requirement for driving in the UK, insurance is the biggest running cost for car owners.

To put it in perspective, research carried out by AA recently found the average cheapest annual premium for comprehensive cover in the UK is £1,034.

There are a number of factors that affect the price you have to pay for insurance. The main ones are your driving history & the vehicle you’re looking to insure. However some of the other factors that can affect your insurance include:

  • Location;
  • Job;
  • Gender;
  • Where the car will be parked;
  • What the car will be used for.

What will also influence your premium is the type of insurance you choose. The most common kinds of insurance are:

  • third-party - the legal minimum requirement for driving in the UK - this covers damage to other vehicles, property or people;
  • third-party fire and theft - as well as covering you for the above, it also covers you if your car is damaged by fire or stolen;
  • fully comprehensive - this covers you for all of the above, but normally insures you for accidental damage, equipment (such as sat navs) damaged or stolen from within the car and insurance to drive other vehicles too.

However there are ways to save on insurance. Sometimes multi-car insurance for households with more than one car can reduce your bill. Also for younger drivers policies are available now linked to usage limits, these can save you large amounts of money.


The amount of car tax, also known as road tax or Vehicle Excise Duty (VED), you need to pay each year is based on different factors depending on when your car was registered. 

Tax for older vehicles - those registered before 1st March 2001 - is worked out based on their engine size. There is one rate for engines that are 1,549cc and smaller, and another for engines larger than 1,549cc.

Tax for cars registered after 1st March 2001 is calculated according to their carbon dioxide (CO2) emissions, with the aim of rewarding drivers of more eco-friendly cars. Details of your car's emissions can be found in its V5C document.

The 13 tax bands and prices are:

Tax band    CO2 emissions (g/km)    Yearly rate

A                                           Up to 100                                     FREE

B                                           101-110                                         £20

C                                           111-120                                         £30

D                                           121-130                                       £100

E                                           131-140                                        £120

F                                            141-150                                       £135

G                                           151-165                                       £170

H                                           166-175                                       £195

I                                             176-185                                       £215

J                                            186-200                                       £250

K                                            201-225                                      £270

L                                            226-255                                       £460

M                                               255+                                         £475



This is undoubtedly the biggest outlay on a day-to-day basis and is a cost that car buyers must make sure they take into account from the outset.

Fuel costs different amounts depending on whether the car takes petrol or diesel and where you are buying your fuel.

The average price of petrol is currently 135.08p per litre, and 141.89p for diesel. The average family has to spend between £95-£100 filling up their tank.

Fuel prices are, at the time of writing, highest in the South East of England and lowest in Yorkshire and Humberside.

Servicing and maintenance

Servicing is a key cost people often don’t think about. With the complexity of modern cars regular maintenance by a skilled technician can be essential in avoiding huge repair bills. The recommended servicing interval for your specific car should be detailed in your car's manual. According to Which?, the median average price for a service is £141.

With any luck, these bills won't be a cost you encounter regularly. However, if you have a problem with your car then it’s always best to shop around for repair costs. Specialist repairers can often save you money, but always check they have the right skills & equipment for the repair you require undertaking.

You also need to remember your car's MOT, which ensures it meets road safety and environmental standards and is a legal requirement for driving a car in the UK.

Brand new cars don't need to have an MOT for the first three years of ownership. Once that time has elapsed, the car must have an MOT every year.

MOT test fees are currently £54.85 for cars with up to eight passenger seats.

Other costs to consider

  • Parking
  • Tolls
  • Accessories
  • Car wash
  • Breakdown cover

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