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Unveiling The True Cost Of Car Ownership In The UK In 2024
by Marsh Finance on Aug 8, 2024 3:00:00 PM
Key Summary
There are lots of costs that come with a car, not just the purchase price. We have looked at everything that could cost you when purchasing a car.
Depreciation
This is most common with new cars, and is the drop in value of a car as it ages. The value of your car at the end of your agreement will be significantly less than at the start; this is depreciation. Different cars depreciate more than others, so it's important to research the depreciation of a brand before picking it.
Fuel
Petrol/diesel tends to cost around £1,400 a year.
Car Insurance
You will likely pay around £561 a year on insurance. This will likely come down as you become a more experienced driver, providing you avoid collisions and damages.
Maintenance And Repairs
An issue can arise at any time. You will need around £300 a year set aside for repairs, with this amount increasing the older the car you own.
Road Tax
Road tax is around £140, and must be paid if you want to drive on public roads.
These expenses have pushed some to electric vehicles, with their cheaper charging. However, where you save on fees, you lose time charging your car.
Overall, it costs around £3,500 a year to run a car in the UK. If this cost is too high for you, why not consider car finance.
As we go through 2024, understanding all the costs that come with a car is key. At Marsh Finance, we believe in giving our customers the knowledge they need to get the best car finance deals. This article aims to shed light on the various expenses of owning a car in the UK, providing a clear picture for car owners.
![A red model car sat on stacks of coins.](https://www.marshfinance.com/hs-fs/hubfs/Imported_Blog_Media/Car-Finance-Money-4.png?width=800&height=300&name=Car-Finance-Money-4.png)
Understanding The Purchase Price And Depreciation
You might be looking to get a car in the UK. Don't fear, you have lots to choose from. If you want a car like the Ford Fiesta, you'll have to pay around £18,000. For a more premium model like the VW Golf, you will have to pay around £30,000. However, the cost of buying a car is just the beginning. Depreciation plays a big role in car ownership. The average annual cost of depreciation is around £1,104. Depreciation is when your car loses value over time. This happens to everyone, and starts as soon as you drive out of the dealership. Making sure you know about the depreciation of your car is key. To know how much your car will be worth in the future, get a good idea of your depreciation. Alternatively, buying a used car can save you money. Used cars don't lose as much value as new cars right away. This means you might be able to sell it for more later.
![A row of multi-coloured petrol pumps.](https://www.marshfinance.com/hs-fs/hubfs/Imported_Blog_Media/Petrol-Pumps.png?width=800&height=300&name=Petrol-Pumps.png)
Fuel Costs: A Major Expense
Fuel costs a lot these days. Petrol and diesel prices seem to always be going up. Currently, it can cost over £1,400 a year to fill up your car. How much you spend depends on how often you drive and the type of car you have. Make sure you have money set aside for fuel. Without it, you're not getting very far!
![Two hands protecting a piece of paper in the shape of a car, representing car insurance and protection.](https://www.marshfinance.com/hs-fs/hubfs/Imported_Blog_Media/Car-Insurance-2.png?width=800&height=300&name=Car-Insurance-2.png)
The Insurance Factor
On average, UK car owners spend about £561 each year on insurance. Car insurance costs change a lot. There are lots of things that affect how much insurance you pay:- How old you are
- What car you have
- Your driving record
- Where you park your car
![A close up of an exposed car tyre frame with the brakes attached.](https://www.marshfinance.com/hs-fs/hubfs/Imported_Blog_Media/Car-Brakes-1.png?width=800&height=300&name=Car-Brakes-1.png)
Maintenance And Repairs: An Ongoing Commitment
Taking care of your car costs money. You'll need to spend about £273 a year on things like oil changes and repairs. As you might expect, older cars usually cost more to fix. If you are interested in a used car, make sure you are ready for the added costs that might come.
Additional Running Costs To Consider
There are other costs too. You'll need to pay a yearly tax called road tax. This works out at about £141, which isn't too large an expense. Parking and using roads can cost around £44 a year. And then there are little things like washing your car or paying for a garage. These can add up to about £259 a year, another cost to think about.
![A close up of an electric charging point with a car plugged in.](https://www.marshfinance.com/hs-fs/hubfs/Imported_Blog_Media/Electric-Charger.png?width=800&height=300&name=Electric-Charger.png)
The Shift To Electric Vehicles (EVs)
Electric Vehicles (EVs) have an interesting relationship with price. Electric cars cost more to buy at the start, but they're cheaper to run. Obviously, you don't have to pay for petrol or diesel. This means you can save lots of money in the long run. You'll spend about half as much on charging an electric car compared to filling up a petrol car. One thing to think about is charging time. EVs can take a while to charge, and you need to plan charging stops into long drives. Don't get stuck somewhere without charge!
Understanding Optional Expenses
You might be a car enthusiast and want to join a motoring group. This will of course cost you. A more common expense is driving lessons. These are not cheap, and if you are learning to drive you need to take into account the cost of lessons to your overall budget for a car. While these costs are not mandatory, they can contribute to the overall financial commitment of car ownership.
![Two hands with pens hover over the signing area of a car-related document.](https://www.marshfinance.com/hs-fs/hubfs/Car%20Finance%20Document.png?width=800&height=300&name=Car%20Finance%20Document.png)
Considering Car Finance
Buying a car on finance is a really good way to get on the road sooner. It's important to know how much you'll pay each month, and how much extra you'll pay in interest. There are extra fees too, so it's a good idea to use a car finance calculator. This can help you figure out the total cost. Click here to use our calculator.
The Bottom Line On Car Ownership Costs
Owning a car can be expensive. On average, it costs around £3,580 a year to run a car in the UK. But this number can change a lot depending on a few key factors:
- What kind of car you have
- How much you drive
- Where you live.
![A person smiling at the camera whilst holding up a white speech bubble cut out, symbolising them speaking and offering their opinion.](https://www.marshfinance.com/hs-fs/hubfs/Person%20Speech%20Bubble.png?width=800&height=300&name=Person%20Speech%20Bubble.png)
Our Two Cents
The costs don't stop once you buy the car. Fuel, insurance, and car tax are regular expenses. You'll also need to pay for things like repairs, new tires, and the car losing value over time. It's important to think about all these costs when deciding if you can afford a car. At Marsh Finance, we are here to help you. With tools like our finance calculator and comprehensive car marketplace, we make buying and paying for your car easy. With today's economy, getting a new car can be tough. We help you find the best deal and payment plan. 🚗💡📊💳
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