Car Running Cost Calculator UK
Calculate the true total annual cost of owning and running a car in the UK, including fuel, insurance, road tax, MOT, servicing, tyres, depreciation and finance payments.
Annual Car Cost Breakdown
Enter your costs below. Default values show UK averages — adjust to match your actual vehicle.
UK Average Running Costs by Car Type (2025)
| Car Type | Example | Fuel/yr | Insurance | Total/yr* |
|---|---|---|---|---|
| Supermini | Fiesta, Corsa | £1,400 | £480 | £3,400 |
| Family Hatchback | Golf, Focus | £1,600 | £540 | £4,100 |
| Compact SUV | Qashqai, CX-5 | £1,900 | £620 | £4,800 |
| Executive Saloon | 3 Series, A4 | £1,700 | £780 | £5,800 |
| Electric City Car | Leaf, e-208 | £550 | £510 | £3,100 |
*Total annual costs include fuel, insurance, road tax, MOT, servicing, tyres and depreciation for 10,000 miles. Excludes finance charges. Based on 30–35 year old driver. Source: RAC, AA, Which? motoring data.
Understanding UK Car Running Costs
The true cost of car ownership in the UK is substantially higher than most drivers realise. When surveyed, the average UK driver estimates their annual car costs at around £2,500, yet studies by the RAC and AA consistently show the actual figure is between £3,400 and £5,000 per year for typical drivers. The gap arises because drivers tend to think only about fuel and insurance, overlooking the invisible but significant costs of depreciation, tyre replacement, and opportunity cost of capital tied up in the vehicle.
Depreciation: The Hidden Biggest Cost
Depreciation is the difference between what you paid for your car and what you sell it for. It is typically the largest single running cost for car owners. A new car registered at £20,000 might be worth only £12,000 after three years — a depreciation cost of £8,000 or roughly £2,667 per year. Some premium models with poor residual values depreciate even faster. By contrast, models with strong residual values such as Toyota, certain Land Rover variants, and well-specified German premium cars retain value better. Buying a two or three-year-old approved used car allows you to avoid the steepest first-year depreciation, which can be 20–35% for mainstream new models.
PCP vs PCH vs Buying: Which is Cheapest?
Personal Contract Purchase (PCP) is the UK's most popular car finance product, with around 80% of new car finance arranged this way. You pay a deposit and monthly payments over typically 24–48 months, then either hand the car back, pay a balloon payment to own it, or part-exchange into another PCP. PCP payments are lower than hire purchase because you are financing the depreciation rather than the full vehicle value. Personal Contract Hire (PCH) — also called leasing — is purely a rental arrangement with no option to own. Monthly payments are lowest of all finance options, and maintenance can be bundled in. For business users, leasing offers tax advantages. Outright purchase avoids interest charges but ties up capital. For most private drivers covering 8,000–12,000 miles per year, PCH on a two to three-year contract often represents the best value when considering total cost of motoring.
Car Insurance Cost Factors
UK car insurance premiums are influenced by numerous factors including: your age and driving experience, your claims history and no-claims bonus, the insurance group rating of your vehicle (1–50, with Group 1 cheapest), where you live and keep the car, your annual mileage, your occupation, and the security of your vehicle. London drivers typically pay 30–40% more than the UK average due to higher theft and accident rates. Adding a more experienced named driver to a policy can reduce premiums, particularly for young drivers. Black box (telematics) insurance can save 20–40% for young careful drivers. Shopping around at renewal using comparison sites remains the single most effective way to cut insurance costs.
Servicing and Maintenance Costs by Car Age
New cars in their first three years are typically covered by a manufacturer warranty and have minimal unexpected repair costs. Servicing costs for this period average £200–£350 per year for budget cars and £400–£700 for premium models. Once out of warranty (typically 3–5 years old), mechanical failures become more likely. Cars aged 5–8 years old typically cost £400–£600 per year in servicing and repairs including MOT failures. Cars over 10 years old can cost £600–£1,200 per year or more in unplanned repairs. Regular servicing to manufacturer schedules is the best way to prevent expensive failures and maintain resale value.
Mustafa Bilgic — UK Motoring Finance Specialist
Mustafa covers UK car ownership costs, motoring finance and transport economics for UK Calculator. All figures reflect current UK market data for 2025/26. This calculator provides estimates — actual costs will vary by vehicle, driver profile and usage patterns.
Frequently Asked Questions
How much does it cost to run a car in the UK per year?
The average UK car costs between £3,400 and £5,000 per year to run, according to RAC and AA research. This includes fuel (typically £1,500–£2,500/year), insurance (£561/year average for 25–35 year olds), road tax (£190/year standard rate), MOT (up to £54.85), servicing, tyres and depreciation. Running costs vary significantly by car type, age, driver profile and location.
What is the biggest running cost for UK cars?
Depreciation is typically the single largest cost of car ownership, accounting for 30–40% of total running costs. A new car can lose 15–35% of value in the first year and up to 50% in three years. Fuel is usually the second largest cost, followed by insurance. Buying a two or three-year-old car rather than new dramatically reduces the depreciation element.
Is PCP, PCH or buying outright cheapest for running a car?
Personal Contract Hire (PCH) leasing typically has the lowest monthly payments and eliminates depreciation risk. PCP offers lower payments than hire purchase with a balloon payment at the end. Buying outright avoids finance charges but requires capital. For many drivers, PCH or PCP on a nearly-new car offers the best balance of monthly affordability and total cost of motoring.
How much does car insurance cost in the UK?
Average UK car insurance for a 25–35 year old is approximately £561 per year for comprehensive cover. Young drivers aged 17–24 face averages of £1,500–£2,500/year. Drivers over 50 may pay £300–£450/year. Adding a named experienced driver, increasing voluntary excess, and building a no-claims bonus are the most effective ways to reduce premiums.
How much does an MOT cost in the UK?
The maximum MOT fee for a car is £54.85, set by the DVSA. Many garages charge less or offer promotional pricing. The MOT tests roadworthiness annually for vehicles over three years old. Failure to have a valid MOT can result in a fine of up to £1,000 and may invalidate your insurance.
What is the cheapest car type to run in the UK?
Small supermini-class cars (e.g. Polo, Fiesta, Corsa) are typically cheapest to run, with annual total costs of around £3,400–£4,000 including depreciation. Their lower insurance groups, smaller engines and cheaper parts make them economical. Electric city cars are increasingly competitive on running costs with no fuel duty, low VED and lower servicing costs.
How does depreciation affect car running costs?
Depreciation is the loss in value of your car over time. New cars typically lose 15–35% in year one and up to 50% in three years. A car bought for £25,000 might be worth £12,000–£14,000 after three years. Buying a two or three-year-old car lets a previous owner absorb the steepest depreciation. Cars with strong residuals (Toyota, Lexus, some premium brands) cost less to own over time.