How To Save On Car Running Costs

by Jamie Burgoyne on Aug 29, 2025 1:33:43 PM

Key Summary

The average cost of running a car in the UK can be anywhere from £3,000 to £4,000, so it's important to save where you can. Here's our top tips to reduce running costs for your car:

Look for cars in car insurance groups 1-5, these are the cheapest to insure.
Choose a car with low emissions and see your road tax fall. Also, paying for your tax up front can bring down the price.
Check for any issues that might come up in an MOT and if you can fix them yourself, do so. Shop around for potential discounts, as some garages offer car maintenance bundles.
Reduce your fuel bill by cutting unnecessary journeys, car sharing, choosing cars with good miles per gallon, or even going with an EV or hybrid.
To avoid depreciation, go for a used car, or a brand that tends to perform well over time.

👉 Ways To Save On Car Insurance
👉 Cut Your Road Tax In 2025
👉 Save On Your Next MOT
👉 Reduce Your Fuel Bill
👉 Avoiding Depreciation
👉 Final Word

The average cost of running a car in the UK ranges anywhere from £3,000 to £4,000, a hefty chunk of your income that could be used elsewhere. We’ve broken down car running costs in a separate piece, How Much Does It Cost To Run A Car In 2025?

Although some costs are unavoidable, there are a few clever ways to reduce them and save some much-needed cash.

Stacks of coins rising in size from left to right, with letters on each eventually spelling 'COSTS', symbolising rising costs.

Cut The Cost, Not The Cover: Smart Ways To Save On Car Insurance

All cars on UK roads must be insured, but that isn’t to say that you can’t save on payments…

Car insurance costs are determined by group, with 1 being the cheapest and 50 the most expensive. Cars are allocated a group based on a few factors:

Engine size
Emissions
Cost
Accident history associated with the brand or model

If you are looking to save on car insurance costs, choose a car that sits in insurance group 1. Here are a few group 1 insurance cars that can help you save:

Citroen C1
Fiat Panda
Hyundai i10
Nissan Micra

These cars all have something in common, size. These smaller vehicles are some of the cheapest to insure on the market and can be a great way to bring down insurance costs, which are £757 on average a year.

(Source: Confused.com)

Curious about car insurance? Visit our dedicated car insurance centre or click below for fast navigation to a specific topic you’re interested in:

A road with 'ROAD TAX' painted on and an arrow directed forwards, representing road tax coming soon.

Drive Smarter, Pay Less: Cut Your Road Tax in 2025

Road tax is another mandatory charge, but again, you can bring down costs with a few simple steps. Road tax can cost up to £195 a year (RAC), so saving on this fee can mean a good chunk of cash coming back to you.

Much like car insurance, road tax is based on vehicle emissions and fuel type. With that in mind, choosing a car in a cheap tax band can help bring down costs. We’ve covered car tax bands in a different guide. Some great cars for bringing down tax costs include:

Nissan Qashqai
Skoda Fabia
BMW 2 Series
Ford Fiesta
Hyundai i10

This isn’t the only way to save on car tax. Paying for a full year upfront can lead to a slightly cheaper rate, helping you save slightly more money.

MOT Money Savers: Cut the Cost of Your Next Test

An MOT will cost £54.85, but issues may lead to repair costs. Check for common issues that you can fix yourself to avoid paying someone to do it for you. On top of this, shop around for potential discounts or bundles that include services

(Source: AutoTrader).

Small Changes, Big Savings: Reduce Your Fuel Bill in 2025

The average price of fuel in the UK ranges from £500 to £1300 a year, based on fuel type. (GOV.UK)

Typically, petrol is the best choice, unless you opt for electric charging via mains (your house/trickle chargers). If you were to use superchargers to charge up your EV, you could pay upwards of £1,300!

Thankfully, fuel is one of the costs you can influence the most. Here are some great ways to bring down fuel costs:

Reduce unnecessary journeys. Is there a shop around the corner? Why not walk? Yes, it might take an extra 10-15 minutes, but over time, this can help you save up to a tank of fuel! Of course, only walk if it is safe to do so.
Car share. Do you have a work colleague who lives near you? Why not car share? A popular method in America, car sharing can halve fuel costs by alternating cars weekly.
Choose a car with a good miles per gallon (MPG) score. Some cars use fuel more efficiently, and choosing these for your next ride can help you save massively in the long run.
Consider an EV or hybrid. This one comes with a slight caveat. If you actually want to save money by switching, it’s important that you charge your car at home. If you use a supercharger every time, you may actually end up spending more in a year than you would on petrol or diesel.

Stop the Drop: How to Protect Your Car’s Value

Depreciation is an unseen issue that hits some drivers the hardest financially. Depreciation is the rate at which a car loses value and is most common in new cars. If you buy a new car with the hope of selling it for a good amount in future, be aware that depreciation might have other ideas.

Thankfully, there’s a way to avoid this. Used cars are popular not only for their cheaper price but also for their protection against depreciation. Used cars have likely already gone through the main depreciation stage of a car's life cycle, so you can expect the car to hold its value for longer.

On top of this, you can look for cars that hold their value well.

MG cars are reliable, stylish and cheap. These cars actually gain in value at times, meaning you could turn a profit!
A classy brand with plenty of history and demand, these cars can increase in value, too, over time.
The first car on the list to lose money over time, albeit only 1.69% on average. Compared to other brands not in this list, this is a fantastic score.
Another car brand known throughout the world, BMWs actually increase in value by 1.39%.

(Source: CarWow)

Choosing any of these brands can help you avoid the depreciation hit and increase your chances of retaining significant funds when it comes to selling.

A Final Word

There you have it, a definitive guide on reducing how much your car costs to run. There are plenty of good tips here, some more expensive than others, but all committed to helping you save financially.

If car costs are alarming you, and the outright purchase price of a car makes car ownership feel like a mountain to climb, why not consider finance? Car finance helps you avoid an outright payment, with affordable monthly chunks that are achievable and suited to you. Complete our application form with no obligations and see if you would be approved today.

Topics: Latest Car Updates & Advice Money Help