OWNERSHIP
How much does it cost to own a car in the UK?
Purchasing a car in the UK can be exciting, but there are a number of costs that need to be borne in mind as well.
In this guide, we’ll dig into the costs that a UK motorist might be expected to face when purchasing a car, including both one-off and ongoing expenses-as well as suggestions on how to make the financial experience a little easier. Let’s get into it!
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The purchase cost
Likely to be the single biggest cost you make in your motoring career will be obtaining the vehicle itself. Some individuals can afford and choose to pay the whole purchase price up front, although many car purchases in the UK and around the world are financed with monthly payments being made in order to acquire the vehicle. Interest may be charged on these payments, which will add to the overall cost of the vehicle.
At the time of writing the cheapest cars in the UK in terms of purchase price were around £14,000 to £15,000 if purchased new, while as we all know the sky’s the limit for how expensive a car can be-although most road users will be unlikely to be buying a car worth more than £50,000 or so. You may be able to buy a vehicle for considerably less than this if you go hunting around the second-hand market, although it’s especially important to check that the vehicle you’re looking it is roadworthy with a valid MOT and has a detailed service history, as the risk of buying a ‘lemon’ can be higher with second-hand vehicles.
Insurance
Insurance is essential for motoring, and is something that should be budgeted for annually. The price you’ll pay for your insurance depends on a wide variety of factors, including:
What the vehicle is
The insurance group specified for the vehicle will impact on any insurance quote you may receive
Your age
One of the most important factors
Your gender
Young male drivers pay substantially more than young female drivers for insurance.
Your profession or educational status
Your job title can affect your car insurance premium.
Where the car is stored
A car stored inside a locked garage will be noticeably cheaper to insure than one parked on the street
Your no claims bonus
If you have one
Regarding young drivers, a common tactic used by parents is to have their child as a named driver on a car with the parent nominally specified as the main driver, when the son or daughter will in fact be the main user of the car. This is generally discouraged; being honest with insurers is usually the best policy.
The average cost of insurance in the UK at the time of writing was between £500 and £700 annually, with mature drivers paying considerably less than other cohorts. Online price comparison tools are a popular way of keeping this particular cost down.
Vehicle Road Tax
Every vehicle in the UK has to pay vehicle road tax in order to be legal to drive on the UK’s roads (you can however obtain a SORN, or statutory off-road notice, which exempts the vehicle from tax if it will be in storage or on private land only for an extended period) so it’s an essential expense to budget for if you plan on using a car.
The current price of UK Road tax for vehicles registered after 1 April 2017 is £200 for a standard annual renewal, with the initial tax payment based on the vehicle’s emissions (more details including a full table are on the gov.uk website but as a brief summary, prices range from £115 for vehicles up to 50g/km of emissions up to £5,690 for the most polluting vehicles)
Servicing and MOTs
Vehicles in the UK require an MOT after 3 years have passed since their registration, and then subsequently every year thereafter. Whilst servicing is not strictly speaking a legal requirement, it is strongly recommended to UK motorists that they get their vehicles checked regularly to keep them in good working order and reduce the chances of substantial technical problems as time goes on, as an MOT does not cover everything relating to engine and vehicle health.
The price of an MOT in the UK is capped at £54.85, so you may be able to get one done cheaper depending on your local garages.
Meanwhile, for servicing, this will depend to a fairly large degree on the type of car (for example, older cars/ classic cars may need more time and parts spending on them which will translate to a higher overall cost) that aside, UK motorists can expect to pay between £150 and £300 for a typical full (annual) service in 2026. Major services may cost more, and interim (6 month) services typically cost between £80 and £200.
Fuel
When most people think of car costs the item that will spring to mind first will often be the cost of the fuel, whether that’s petrol, diesel, or increasingly electricity, with the increasing number of electric cars on Britain’s roads.
Fuel prices can fluctuate dramatically depending on geopolitical events and government tax policy, among other factors, although if you shop around and use online checkers you may be able to more easily locate cheap fuel in your area. Just be sure you don’t drive too far to fill up somewhere slightly cheaper, as this may be a false economy!
The average price of petrol in the UK as of August 2026 was 161p/litre, whereas the price of diesel was 183p/litre. Electricity costs to charge electric cars can vary considerably as well, and on average you could expect to pay around 54 pence per kilowatt hour for standard chargers and 80p for more rapid chargers. If you’re able to charge your vehicle at home, your costs will potentially be much less than for public electricity.
If you need to know more about recent petrol and diesel prices and how they compare to inflation, you can check out our handy guide to fuel and diesel prices over time.
Depreciation
The hidden killer of car value, depreciation is a factor often not given enough weight by the motoring community. In simple terms, cars tend to lose value over time (with some rare exceptions) and some lose value faster than others. This effectively costs you money in the long run, as it’s very likely that when you come to sell the car that you’ll end up getting less than what you originally paid for it. For example, the first year of a car’s life is usually when the most depreciation happens (typically between 15% and 25%) and after 3 or 4 years the car may be worth around half of what it was when it was new. In terms of some cars that struggle the most with this, one example would be the Audi A8, which after 3 years will typically be worth less than a third of its initial list price, and the BMW 8 series which also has a similar depreciation curve.
The extras-repairs, breakdown cover and parking
Don’t forget to factor in the cost of repairs-whilst modern cars are considerably more reliable than they used to be, you may still from time to time need to budget for making repairs to keep the vehicle safe to drive and road legal. Some repairs will be rather minor-a new wiper blade, for example, which might set you back £5 to £30-or they could be a lot more serious, like a new gearbox or engine, which could potentially cost thousands.
Parking fees, congestion charges in cities like London, and breakdown cover also contribute to the total cost of ownership. Whilst most motorists outside of the capital won’t need to pay a congestion charge, paying for parking is commonplace across much of the UK and having breakdown cover is recommended particularly for older vehicles, so taking these costs into account is worth doing.
The alternative to car ownership-leasing
Owning a vehicle is rather on the expensive side these days, but fear not-there is an alternative!
When you take out a car lease there are a number of financial upsides, which can make the cost of personal transportation considerably easier to bear. Chief among these advantages are the following:
Regular, affordable monthly payments
Compared to the hassle of having to find a substantial five or even six-figure sum to buy a car outright, or having to pay expensive monthly payments to gradually buy the vehicle, this isn’t a problem with leasing-simply make the lower, predictable monthly payments and you’re on your way (the payments are lower as you’re not purchasing the vehicle).
Zero worries about depreciation
As we’ve mentioned above, depreciation can be a real hidden trap when it comes to car financing, with sizeable chunks taken out of vehicle equity each year. Not so with leasing-as you don’t technically own the vehicle, you don’t have to worry about the car’s value going down over time, and can simply hand the keys back once you’re done.
Easier budgeting due to included extras
With leasing you get plenty of things included-with Flexed this includes:
- Manufacturer warranty
- Road tax
- Breakdown cover with Roadside assistance
Having all of these included within the price of your monthly lease substantially eases the headache of separately budgeting for all of these items, and having a warranty and breakdown cover gives you great peace of mind.
Why not contact us today and we’ll help you along with your car leasing journey!
Interested? Please feel free to give us a call on 0800 311 8290 to talk to a member of our friendly team – we’re always on hand to help.
FAQs
Frequently Asked Questions
Hidden
Due to the big savings and age of our Outlet vehicles, delivery and collection aren’t available nationwide. But don’t worry — you’ll get a full handover and walkthrough when you collect your car directly from us in York.
What’s the difference between an MOT and car servicing?
An MOT test is a mandatory annual check to ensure your car meets road safety and environmental standards, required for vehicles over three years old. It covers aspects like brakes, lights, and emissions, but does not include repairs. A car service, on the other hand, is a maintenance procedure recommended by the manufacturer to keep your vehicle running smoothly. Services can be minor or major and may include oil changes, filter replacements, and inspections of components not covered by the MOT. While an MOT is legally required, servicing is optional but highly recommended to prevent breakdowns.
What are the costs of maintaining an electric vehicle (EV) compared to a petrol or diesel car?
Electric vehicles (EVs) generally have lower running costs than petrol or diesel cars, but the upfront price and some maintenance expenses can differ. EVs benefit from cheaper “fuel” costs, as electricity is less expensive per mile than petrol or diesel. They also have fewer moving parts, reducing the need for frequent servicing and lowering long-term maintenance costs. However, tyres and brakes may wear faster due to the weight of the battery, and repairs can be more expensive if something goes wrong. Battery replacement, though rare, is a significant potential cost.
How much does breakdown cover cost and is it worth it?
Breakdown cover in the UK typically costs between £30 and £100-£150 per year, depending on the level of protection and the provider. Basic policies cover roadside assistance, while premium options can include home start, onward travel, and European cover. Whether it’s worth it depends on your car’s reliability, your driving habits, and your ability to handle unexpected breakdowns. For older cars or those with a history of issues, breakdown cover can provide peace of mind.
How do I reduce the cost of running my car in the UK?
Reducing the cost of running a car in the UK involves a mix of practical steps and smart choices. Start by comparing car insurance quotes annually to ensure you’re getting the best deal. Drive efficiently to improve fuel economy, and consider carpooling or using public transport for shorter trips. Regular maintenance, such as checking tyre pressure and oil levels, can prevent costly repairs. If you’re in a city, explore alternatives like cycling or walking for local errands. Finally, think about downsizing to a smaller, more fuel-efficient car if your current vehicle is expensive to run.
What are the costs of owning a classic car in the UK?
Owning a classic car in the UK can be rewarding but comes with unique costs. Maintenance and repairs can be expensive, especially if parts are rare or need to be custom-made. MOT tests are still required, but classic cars over 40 years old are exempt from certain emissions standards. Storage costs, such as keeping the car in a climate-controlled garage, also add to the overall expense.
Is buying a used car cheaper than buying a new car?
A used car is often cheaper to buy and may depreciate more slowly, which can reduce the overall cost of ownership. However, older vehicles can bring higher maintenance, repair, and fuel costs, depending on their overall condition and reliability.