As we navigate through 2024, understanding the full spectrum of costs associated with car ownership in the UK is more crucial than ever. At Marsh Finance, we believe in empowering our customers with comprehensive knowledge, especially when it involves financial commitments like car ownership and finance. This article aims to shed light on the various expenses of owning a car in the UK, providing a clear picture for current and prospective car owners.
Understanding the Purchase Price and Depreciation
When it comes to buying a car, the UK market offers a wide range of options. Prices start from around £18,000 for models like the Ford Fiesta and can soar above £30,000 for premium models like the VW Golf. However, the cost of purchasing a car is just the beginning. Depreciation plays a significant role in car ownership, with an average annual cost of around £1,104. This depreciation factor is an essential consideration for those looking to understand the long-term financial impact of their car purchase. For some buyers, it’s better to purchase a used car versus a vehicle that is brand new, as depreciation is typically lower for second-hand vehicles.
Fuel Costs: A Major Expense
One of the most significant running costs for car owners in the UK is fuel. Given the rising petrol and diesel prices, the annual fuel cost has escalated to over £1,400. This expense largely depends on your driving frequency and the fuel efficiency of your vehicle.
The Insurance Factor
On average, UK car owners spend about £561 each year on insurance. This cost varies widely depending on personal factors such as the driver’s age, the car’s model, driving history, and where the vehicle is parked at night. Want to find out the cheapest job titles for car insurance? Check out our article here.
Maintenance and Repairs: An Ongoing Commitment
Another crucial aspect of car ownership is maintenance and repairs, costing around £273 annually. Older vehicles or those out of warranty often incur higher maintenance costs, making this an important consideration for those purchasing used cars.
Additional Running Costs to Consider
Besides the above expenses, car owners also face other costs like road tax, which averages £141 yearly, and parking fees and tolls, adding approximately £44 annually. Additional upkeep expenses, including garage rent, car washing, and other miscellaneous costs, are about £259 per year.
The Shift to Electric Vehicles (EVs)
Electric Vehicles (EVs) represent a shift in the cost dynamic. While the initial purchase price of EVs tends to be higher, the running costs, particularly fuel, are substantially lower. The average cost to fuel an EV is about half that of a petrol car, making them an increasingly popular choice.
Understanding Optional Expenses
Expenses like motoring organisation subscriptions and driving lessons are optional but can add up over time. While these costs are not mandatory, they can contribute to the overall financial commitment of car ownership.
Considering Car Finance
For many, car finance is a viable route to car ownership. It’s vital to consider the monthly repayments, the interest rates, and additional fees associated with car loans or PCP agreements. Tools like Marsh Finance’s car finance calculator can be invaluable in estimating these costs.
The Bottom Line on Car Ownership Costs
The average annual cost of running a car in the UK is approximately £3,580, though individual expenses can vary based on factors like car type, usage, and personal circumstances.
Our Two Cents
Owning a car in the UK involves a range of costs that extend far beyond the initial purchase price. From fuel and insurance to maintenance and depreciation, these expenses add up and form an essential part of the budgeting process for any car owner or prospective buyer. At Marsh Finance, we are dedicated to helping you navigate the financial aspects of car ownership. With tools like our finance calculator and comprehensive car marketplace, we aim to simplify the process of owning and financing a car in today’s economic landscape. 🚗💡📊💳
Finance is subject to status
Rates from 12.9%
Representative example: borrowing £10,000 over 60 Months with a representative of 23.0% APR, an annual interest rate of 23.0% (fixed) and a deposit of £0.00, the amount payable would be 59 repayments of £269.58 per month, with one final repayment of £279.58 (which includes the option to purchase fee of £10.00), with a total cost of credit of £6,184.80 and a total amount payable of £16,184.80. Marsh Finance Limited are a lender, not a broker.
Marsh Finance Limited are a lender, not a broker.
This is for illustrative purposes only and is not a quote or an offer of finance.