The cost of owning a car in the UK goes well beyond the price you pay for it. Every year you'll pay for insurance (the ABI average was £566 in mid-2026), vehicle tax (£200 a year for most cars registered since April 2017), an MOT once the car is 3 years old (up to £54.85), servicing, fuel and wear items like tyres and brakes. On top of that, the car loses value every month you own it, and on a newer car depreciation is often the biggest cost of all.
Insurance: the biggest bill you'll see
For most drivers, insurance is the largest single payment of the year. The Association of British Insurers (ABI) says the average motor premium actually paid was £560 in the first quarter of 2026 and £566 in the second quarter, according to its Q2 2026 motor insurance figures. The same ABI release said claims payouts hit a record £3.2 billion, driven by the rising cost of repairs, which is one reason premiums have stopped falling.
Quotes run higher than what people end up paying. The Confused.com Car Insurance Price Index with WTW put the average comprehensive quote at £719 for the 3 months to May 2026, edging down to £713 in the 3 months to August. Young drivers pay far more: the WTW release for March to May 2026 gave an average of £1,695 for 17-year-olds and £1,392 for 22-year-olds.
Your own price depends on your postcode, age, claims history, job, annual mileage and the car itself. A few things are worth knowing before you buy:
- Get insurance quotes on the exact model and engine before you commit. Two versions of the same car can sit in very different insurance groups.
- Paying monthly is usually a form of credit, so it tends to cost more than paying the year upfront. Check the APR and the total amount payable on the quote.
- A car with a write-off history can be harder or dearer to insure. If you're looking at one, read our guide on Category N and S write-offs first.
Vehicle tax and the expensive car supplement
How much vehicle tax (VED) you pay depends on when the car was first registered.
Cars registered from 1 April 2017
After the first year, most cars pay the standard rate of £200 a year if you pay in one go, according to the GOV.UK vehicle tax rate tables. Paying by 12 monthly Direct Debits costs £210 in total, so spreading it out costs you an extra £10.
If the car had a list price above £40,000 when new (petrol or diesel), you also pay the expensive car supplement of £440 a year for 5 years, starting from the second time the car is taxed. That takes the annual bill to £640. For electric cars, the threshold is £50,000, and the supplement applies to electric cars registered from 1 April 2025. Zero-emission cars registered before 1 April 2025 are exempt from it. Electric cars now pay the same £200 standard rate as petrol and diesel cars from their second tax payment.
The list price is what the car cost new with its options. What you pay for it second-hand makes no difference. A 4-year-old SUV that was £42,000 new can still carry the supplement even if you buy it for £20,000, so check before you set a budget.
Cars registered between March 2001 and March 2017
These cars are taxed on CO2 emissions. On current GOV.UK rates, the lowest band (up to 100g/km) pays £20 a year, a car in the 151 to 165g/km band pays £275, and the top band (over 255g/km) pays £790. If you're comparing an older large-engined car with a newer one, the tax difference can be several hundred pounds a year. Our guide to vehicle tax bands explains how to work out a car's band.
The MOT and what it really costs
Cars need their first MOT at 3 years old and then every year. The maximum fee a test centre can charge for a car is £54.85, set by the GOV.UK MOT fees page, and many garages charge less.
The fee is rarely the expensive part. Repairs to get the car through are where the money goes, and they're often predictable. Worn tyres, brakes, suspension parts, lights and exhaust problems come up again and again, and our list of the most common MOT failures covers them in detail.
Before you buy, read the car's MOT history. Advisories such as "brake discs worn" or "slight corrosion to suspension arm" tell you what the next owner is likely to pay for. You can see the full history, along with DVLA data and a valuation, by running the registration through a free car check on CheckVehicle. Our guide to the MOT history check shows how to read the results.
Servicing
An MOT checks the car meets minimum safety and environmental standards on the day of the test. It doesn't replace the oil, filters or fluids. Servicing does, and skipping it shortens the life of the engine and can leave gaps in the service history that put off buyers later.
Most manufacturers set a service interval by time or mileage, often every 12 months or a set number of miles, whichever comes first. The schedule for your car is in the handbook or service book.
Prices vary by model, garage and region. The RAC's guide to the cost of car servicing, updated in July 2026, puts a full service at roughly:
- £170 to £210 for a small car
- £210 to £300 for a medium car
- £400 or more for a large car
The RAC says an interim service (oil, filter and basic checks between full services) usually costs about a third to half of a full service. Main dealers tend to charge more than independent garages, and some cars need specific oils or parts that push the price up. Timing belts are a separate cost that comes up at set intervals on many engines, so check whether the car you're looking at has had one done when it was due.
Wear and tear
Some parts wear out however carefully you drive. Tyres, brake pads and discs, wiper blades and the 12V battery are the usual ones. Clutches wear out too on manual cars, especially with lots of town driving.
Tyres are the one most people underestimate. The legal minimum tread for a car is 1.6mm across the central three-quarters of the tread, all the way round, according to the Highway Code. Prices vary a lot by size, brand and whether the car uses run-flat tyres, so check the tyre size on any car you're considering and price a replacement set before you buy. Larger alloy wheels on higher trim levels usually mean dearer tyres. In an AA survey of more than 13,000 drivers published in March 2026, fewer than half (48%) said they felt well prepared to cover the cost of an unexpected tyre replacement.
A simple way to handle these costs is to put a fixed amount aside each month. When the pads or a pair of tyres need doing, the money is already there. Our car maintenance checklist covers the checks that help you spot wear early.
Fuel, charging and emission zone charges
Fuel is a running cost you'll feel every week. It depends on your mileage, the car's economy and the price at the pump. The government is reversing the temporary 5p fuel duty cut in stages: 1p from 1 Sep 2026, 2p from 1 Dec 2026 and a further 2p from 1 Mar 2027, according to the RAC. Electric cars can be much cheaper to run if you charge at home on an off-peak tariff, and dearer if you rely on public rapid chargers.
Where you drive matters too. London's Ultra Low Emission Zone covers all London boroughs and runs 24 hours a day, every day except Christmas Day. If your car doesn't meet the standards, the charge is £12.50 a day, according to TfL. Generally, petrol cars need to meet Euro 4 and diesels Euro 6.
Outside London, Clean Air Zones are run by councils and set their own charges. GOV.UK lists zones in Bath, Birmingham, Bradford, Bristol, Portsmouth, Sheffield and Tyneside, but only the Class D zones (Birmingham and Bristol) charge private cars. Before you buy an older diesel, check if the car is ULEZ, LEZ or CAZ compliant. Residents' parking permits are another cost in many towns and cities, and prices are set by each council.
Depreciation, the cost you don't see
Depreciation is the difference between what you pay for the car and what it's worth when you sell it. You never get a bill for it, which is why it's easy to forget.
New cars lose value fastest. Analysis by Leasing.com of 100 popular new cars, reported by Motoring Research in May 2026, found they lost an average of 26.7% of their value in the first 12 months. The RAC estimates that cars typically lose 50% to 60% of their value over the first 3 years. Some models hold their value much better than others, so the average hides a wide spread.
Buying used means someone else has absorbed that first big drop. A 3 to 5 year old car still depreciates, just more slowly in cash terms. The trade-off is that an older car is more likely to need repairs, which is why its history matters.
Say you buy a 4-year-old hatchback for £10,000 and sell it 3 years later for £6,000. That's £4,000 of depreciation, or about £110 a month, on top of insurance, tax and maintenance. Run your own numbers with real valuations for the model and age you're considering.
Working out the cost of owning a car in the UK
The easiest way to budget is to add up a year of fixed costs, then add the variable ones. For a hypothetical example, take a 2019 petrol hatchback driven 8,000 miles a year by a driver with an average premium:
- Insurance: around £566 (the ABI average; yours could be much higher or lower)
- Vehicle tax: £200
- MOT: up to £54.85, plus any repairs it flags
- Full service: around £170 to £300 depending on the car and garage
- Tyres, brakes and other wear: a monthly amount set aside
- Fuel: your mileage divided by the car's real-world mpg, multiplied by the pump price
- Depreciation: the drop in value over the time you plan to keep it
Before you pay for a car, check the things that would add surprise costs later. That includes the MOT history, whether the car is a recorded write-off, and whether finance is still owed on it. A free check covers MOT history, DVLA data and a valuation; the Total Check (£9.95) adds outstanding finance, write-off and stolen records. You can also check that the car is taxed, insured and MOT'd before you drive it away, and use any faults you find to negotiate on price.
Frequently asked questions
How much does it cost to run a car per year in the UK?
It depends heavily on the car, your age, where you live and how far you drive. Fixed costs for a typical post-2017 petrol car include insurance (ABI average £566), £200 vehicle tax, up to £54.85 for the MOT and a service. Add fuel, tyres, repairs and depreciation for the full picture.
Do electric cars pay road tax in 2026?
Yes. Electric cars pay £10 in the first year and the £200 standard rate from the second payment. Electric cars registered from 1 April 2025 with a list price over £50,000 also pay the £440 expensive car supplement for 5 years.
Is the expensive car supplement based on what I paid?
No. It's based on the car's list price when new, including options. A used car that cost more than £40,000 new (petrol or diesel) will still pay the supplement for its first 5 years of standard-rate tax, whatever you paid for it.
How can I reduce my car running costs?
Get insurance quotes before choosing a model, pay insurance and tax annually if you can, and keep up with servicing. Shop around for MOTs and services at independent garages, check tyre pressures regularly, and avoid cars that would be charged in a clean air zone you drive through often.
What is the biggest hidden cost of owning a car?
For newer cars it's usually depreciation, since new cars lose about a quarter of their value in the first year on average. For older cars, unexpected repairs are often the bigger risk, which is why the MOT history and service records are worth checking before you buy.
