Is it cheap to own a car in the UK?

The True Cost of Car Ownership in the UK: Beyond the Sticker Price

Owning a car in the UK may seem like an affordable option, especially with the allure of competitive sticker prices. However, the reality is that the ongoing expenses associated with car ownership can quickly add up, turning what appears to be a bargain into a significant financial burden.

Insurance

Car insurance is a legal requirement in the UK and its cost can vary greatly depending on factors such as age, driving history, and the type of vehicle. On average, drivers in the UK can expect to pay around £500 per year for comprehensive insurance.

Tax

Vehicle excise duty (VED), commonly known as road tax, is another ongoing expense for car owners. The amount of VED payable depends on the vehicle’s CO2 emissions. For petrol and diesel cars, the first-year rate can range from £10 to £2,365, with subsequent annual rates being considerably lower.

Maintenance

Regular maintenance is essential to keep a car running smoothly and safely. This includes servicing, repairs, and replacing consumable items such as tyres and brake pads. The cost of maintenance can vary widely depending on the type of vehicle, but drivers should budget for at least £500 per year.

Depreciation

Depreciation is the decrease in a vehicle’s value over time. On average, cars in the UK depreciate by around 16% per year, meaning a £10,000 car will be worth only around £8,400 after a year. This can be a significant financial hit, especially if the car is financed.

Fuel

Fuel costs can fluctuate depending on the price of oil and the fuel efficiency of the vehicle. However, drivers in the UK can expect to spend around £1,000 per year on fuel.

Parking

Parking costs can be a significant expense in urban areas. On-street parking charges can vary from £1 to £6 per hour, while off-street parking can cost even more.

Total Cost

Combining all of these ongoing expenses, the true cost of car ownership in the UK can easily exceed £2,000 per year. This is in addition to the initial purchase price of the vehicle.

Budgeting is Crucial

Given the substantial ongoing costs associated with car ownership, it is crucial to budget accordingly. Prospective car owners should not only consider the sticker price but also factor in the estimated expenses for insurance, tax, maintenance, depreciation, fuel, and parking. By doing so, they can avoid unexpected financial burdens and make an informed decision about whether owning a car is truly an affordable option for them.