The costs of owning a car
| Cost | What it depends on | Work it out |
|---|---|---|
| Fuel or charging | Miles driven, economy, fuel price | Fuel cost, EV charging |
| Vehicle tax | Registration date, CO2, list price | Car tax calculator |
| Insurance | Age, postcode, record, car's insurance group | Compare quotes |
| MOT | Up to £54.85 a year for cars over 3 years old | MOT cost guide |
| Servicing and repairs | Age, make, mileage | Garage quotes |
| Tyres | Size, driving style, mileage | Tyre size |
| Depreciation | Price, age, model, mileage | Depreciation calculator |
| Finance interest | APR, term, balloon | PCP calculator |
| Parking, tolls, charges | Where you drive | Clean air zones |
A worked example
A four-year-old petrol family hatchback bought for £15,000, doing 7,000 miles a year at 45mpg:
| Cost | Per year |
|---|---|
| Fuel (7,000 miles, 45mpg, 174.5p a litre) | £1,234 |
| Vehicle tax (registered after April 2017) | £200 |
| Insurance (varies widely) | £500 to £1,000 |
| MOT | £35 to £55 |
| Service | £150 to £300 |
| Tyres and small repairs (averaged) | £150 to £300 |
| Depreciation (about 12% of £15,000) | about £1,800 |
| Total | about £4,070 to £4,890 |
| Per mile | about 58p to 70p |
Insurance, servicing and repair figures are typical ranges and vary a great deal by driver and car. Fuel and tax use the calculators on this site with 2026 figures.
How to cut your running costs
- Buy nearly new. Letting the first owner take the steepest depreciation saves the most money.
- Drive smoothly. Gentle acceleration and keeping to 70mph or less can improve economy by 10% or more. Measure yours with the MPG calculator.
- Keep tyres at the right pressure. Under-inflated tyres raise fuel use and wear out faster.
- Shop around for insurance every renewal. Renewal quotes can no longer be higher than for new customers, but prices still vary a lot between insurers.
- Pay tax annually rather than monthly to save 5%.
- Consider electric if you can charge at home. See petrol vs electric running costs.
- Claim mileage if you use your own car for work. HMRC allows 55p a mile tax-free for the first 10,000 business miles. See the mileage allowance calculator.
Sources
Checked against official sources on 15 October 2026. Rules and prices change, so confirm anything important on GOV.UK. Spotted something out of date? Tell us.