Cost of Running a Car UK 2026 — Annual Expenses Breakdown

Car ownership involves many costs beyond fuel. Here’s the full picture of what running a car really costs.

Total Annual Running Costs

Average by Car Type

Car Type	Annual Running Cost	Monthly
Small petrol (Fiesta)	£3,500-4,500	£290-375
Medium petrol (Golf)	£4,500-6,000	£375-500
Large petrol (BMW 3)	£6,000-8,000	£500-650
Small diesel	£3,800-5,000	£315-415
Medium diesel	£4,800-6,500	£400-540
Electric (city car)	£2,500-3,500	£210-290
Electric (Tesla-type)	£3,500-5,500	£290-460
Hybrid	£3,500-5,500	£290-460

Cost Breakdown (10,000 miles/year)

Cost Category	Annual Amount	% of Total
Depreciation	£1,500-4,000	25-35%
Fuel	£1,000-2,000	20-25%
Insurance	£400-1,500	10-20%
Maintenance/repairs	£500-1,500	10-15%
Tax (VED)	£0-600	2-8%
MOT	£55	1%
Tyres	£150-300	3-5%
Parking	£0-1,000+	Variable
Finance (if applicable)	£2,000-6,000	Varies

Fuel Costs

Current Fuel Prices (Approximate)

Fuel Type	Price Per Litre
Petrol	£1.40-1.55
Diesel	£1.45-1.60
Electricity (home)	24p/kWh
Electricity (public)	40-70p/kWh

Annual Fuel Cost by Vehicle

Car Type	MPG	10,000 Miles	15,000 Miles
Small petrol (50 mpg)	50	£1,300	£1,950
Medium petrol (40 mpg)	40	£1,625	£2,440
Large petrol (30 mpg)	30	£2,170	£3,250
Small diesel (60 mpg)	60	£1,130	£1,695
Medium diesel (50 mpg)	50	£1,360	£2,040
Electric (4 mi/kWh)	N/A	£600 home	£900 home

Electric vs Petrol Fuel Costs

Annual Mileage	Petrol (40 mpg)	Electric (home)	Saving
8,000 miles	£1,300	£480	£820
10,000 miles	£1,625	£600	£1,025
15,000 miles	£2,440	£900	£1,540

Insurance

Average Premiums by Age

Driver Age	Average Annual Premium
17-19	£2,000-4,000
20-24	£1,200-2,500
25-29	£700-1,200
30-39	£500-800
40-49	£400-700
50-59	£350-600
60-69	£350-600
70+	£400-700

Factors Affecting Premium

Factor	Impact
Age	Major (young = expensive)
No claims bonus	Major (up to 80% discount)
Car insurance group	Significant (1-50 scale)
Location	Significant
Annual mileage	Moderate
Occupation	Moderate
Voluntary excess	Moderate
Named drivers	Can reduce or increase
Modifications	Usually increases

Ways to Reduce Insurance

Strategy	Potential Saving
Increase voluntary excess	10-20%
Black box/telematics	10-30%
Build no claims	Up to 80%
Pay annually	10-15% vs monthly
Shop around	20-40%
Add experienced driver	Varies
Lower mileage	5-15%

Vehicle Tax (VED)

First Year Rate (2025/26)

CO2 Emissions	First Year Rate
0 g/km (electric)	£0
1-50 g/km	£10
51-75 g/km	£30
76-90 g/km	£135
91-100 g/km	£175
101-110 g/km	£195
111-130 g/km	£220
131-150 g/km	£270
151-170 g/km	£680
171-190 g/km	£1,095
191-225 g/km	£1,650
226-255 g/km	£2,340
Over 255 g/km	£2,745

Standard Annual Rate

Vehicle Type	Annual Rate
Petrol/diesel (after first year)	£190
Alternative fuel	£180
Electric	£0 (until 2025), then £190
Cars over £40,000 new	+£410/year for 5 years

MOT & Maintenance

MOT

Item	Cost
MOT test fee (max)	£54.85
Retest fee	Varies (often free if quick)
Typical garage MOT	£35-55

Service Costs

Service Type	Typical Cost
Interim service	£100-200
Full service	£200-400
Major service	£300-600
Dealer service	£200-500+
Independent garage	£100-300

Common Repair Costs

Repair	Typical Cost
Brake pads	£100-200
Brake pads + discs	£200-400
Clutch replacement	£400-800
Timing belt	£300-600
New battery	£80-200
Exhaust replacement	£200-500
Air conditioning regas	£50-100
Full set of tyres	£200-600

Annual Maintenance Budget

Car Age	Suggested Budget
0-3 years	£300-500
3-5 years	£500-800
5-10 years	£800-1,500
10+ years	£1,000-2,000+

Depreciation

Average Depreciation

Car Age	% of Value Lost
Year 1	15-35%
Year 2	10-15%
Year 3	10-15%
Years 4-5	8-12% per year
After 5 years	5-10% per year

Example: £25,000 New Car

Year	Value	Lost That Year
New	£25,000	-
1	£18,750	£6,250
2	£15,940	£2,810
3	£13,550	£2,390
4	£12,000	£1,550
5	£10,800	£1,200

Minimising Depreciation

Strategy	Impact
Buy 2-3 years old	Avoid biggest drop
Keep mileage moderate	Preserves value
Full service history	Essential for resale
Popular colours	White, black, silver
Careful parking	Avoid damage
Choose popular models	Stronger residuals

Other Costs

Parking

Parking Type	Cost
Residential permit	£0-300/year
Workplace parking	£0-2,000/year
City centre parking	£5-30/day
Airport parking	£30-150/week
Parking fines	£40-100+ each

Breakdown Cover

Provider	Annual Cost
RAC	£40-150
AA	£50-180
Green Flag	£30-100
Car manufacturer	Often included new

Other Expenses

Item	Annual Cost
Car washing	£50-200
Air fresheners, mats, etc.	£30-100
Phone holder, cables	£20-50
Screen wash, oil top-up	£20-50
Car cleaning products	£30-100
ULEZ/CAZ charges (if applies)	£0-4,500

Car Finance

Finance Types

Type	Monthly Range	Notes
PCP	£150-400	Balloon payment at end
HP	£200-500	Own car at end
Lease	£150-500	Return car at end
Bank loan	£150-450	Own car immediately

Total Cost Comparison

Finance vs Cash	Impact
Interest costs	Add 5-15% to car price
Deposit required	10-30% of car value
Monthly commitment	Affects budget
Flexibility	Less than cash purchase

Electric Car Costs

Running Cost Comparison

Cost Element	Petrol	Electric
Fuel/Charging	£1,600	£600
Tax	£190	£0-190
Service	£350	£200
Insurance	£450	£500
Total	£2,590	£1,300-1,490

Electric-Specific Costs

Item	Cost
Home charger installation	£500-1,000 (grants available)
Public charging (average)	£10-20 per 100 miles
Home charging	£3-5 per 100 miles
Battery warranty	Usually 8 years included

Summary: Total Cost of Ownership

5-Year Total Cost (£20,000 Car, 10k Miles/Year)

Cost	5-Year Total
Purchase/depreciation	£10,000
Fuel	£8,000
Insurance	£3,000
Tax	£950
Maintenance	£3,000
MOT	£275
Tyres	£600
Other	£1,000
Total	£26,825
Per year	£5,365
Per month	£447

Key Takeaways

Factor	Key Point
Biggest cost	Depreciation (buy used to save)
Most variable	Insurance (shop around)
Most controllable	Mileage and fuel efficiency
Often forgotten	Tyres, parking, depreciation