Car Costs & Insurance Rates

In this section get free advice on cheap and affordable car insurance rates. Find out and compare the lowest and the cheapest insurance costs online.

The Cost of Running a Car

Everyone knows that running a car costs a lot of money. But how much is a lot of money? Would you be better off taking the bus? Or is running a car well worth the money when compared to the cost of other forms of transport? Whatprice have gathered some car running cost data already.

UK Car running costs example

This example uses a Renault Clio 1.2 litre (made in 2001, bought nearly new in the UK) to calculate a cars running costs. Obviously the running costs will vary from car to car. If you are interested then you should do the calculations yourself, and submit them to Whatprice!

The simplest way to calculate the cost of running your car is to add up all of your bills over the year, take into account depreciation of the car, and that's your cost. However, this doesn't really give a good comparison to other forms of transport, and certainly doesn't help when claiming mileage for business. Therefore a much better way to calculate car running costs is to work out the cost per mile..

To work out the cost per mile of owning a car simply take the annual car cost and divide by your yearly mileage rate. Typically this would be around 12,000 miles a year, but this obviously varies a great deal on how you use the car.

Petrol Running Costs

Next time you fill up the car with petrol, fill it the absolute maximum fill level and then zero your mileage counter. When you come to refill your car again, take the mileage reading and record how many litres of petrol you use. The amount of petrol you use will obviously vary depending on how and where you have driven your car, so it is probably worth repeating this cost calculating exercise a few times to get a good average petrol cost figure.

Cost per mile (p/mile)= Litres put in x 81p / number of milesAnnual Running Cost (£) = Cost per mile x Average mileage /100

For a Renault ClioCost per mile = 40 x 81 / 400 = 8.1p per mileAnnual Running Cost = 8.1p x 12,000 / 100 = £972

Car Insurance Costs

Car insurance costs vary a great deal from driver to driver.

Annual Running Cost = Your annual insurance billCost per mile = insurance bill / annual car mileage / 100

For a Renault ClioAnnual Running Cost = £350 (2 years no claims)Cost per mile = £350 / 12,000 x 100 = 2.9p

Running Cost so far = 11p/mile or £1320 a year 

Car Service and MOT Costs

Again car service prices vary a great deal from car to car and depend on where you get your car services. Typically a service would cost around 100 pounds a year, but this can be much more if you get it properly serviced at an authorized dealer. An MOT would be around 50 pounds a year, as long as the car doesn't require any extra work.

Annual Running Cost = Your annual service billCost per mile = service bill / annual car mileage / 100

For a Renault ClioAnnual Running Cost = £250 (authorized dealer)Cost per mile = £250 / 12,000 x 100 = 2.1p

Running Cost so far = 13.1p/mile or £1570 a year

Car Tax

Unfortunately we all have to pay this, and its about 100 pounds a year for a reasonably non polluting car, this increases slightly for the large, gas guzzling cars.

Annual Running Cost = Car tax billCost per mile = tax bill / annual car mileage / 100

For a Renault ClioAnnual Running Cost = £100 (authorized dealer)Cost per mile = £100 / 12,000 x 100 = 0.8p

Running Cost so far = 13.9p/mile or £1670 a year

Car Wear and Tear Costs

This is a catch all category that collects all the car costs that aren't included elsewhere. This should contain small items such as oil refills, bought washer bottles, replaced light bulbs and replacement of worn tyres. These may seem like small amounts but the costs can quickly add up!

Annual Running Cost = Total of all items bought for carCost per mile = Total cost / annual car mileage x 100

For a Renault Clio:

Annual Running Cost = £179

1 can of car engine oil = £102 bottles washer fluid = £81 replacement headlight bulb = £62 new car tyres = £1201 new washer blade = £101 new car hubcap = £121 bottle car polish = £81 bottle car shampoo = £5

Cost per mile = £179 / 12,000 x 100 = 1.5p

Running Cost so far = 15.4p/mile or £1849 a year

Depreciating Car Value

This running cost of cars is usually forgotten, which is unfortunate as it can often be the biggest expense! Your brand new car is depreciating in value every mile that you drive it, especially when you first drive it off the forecourt. So although once you have bought the car you wont see this added cost it should be taken into account when working out the total running cost of a car.

Annual Depreciation Cost = (Value when bought - Current value) / YearsCost per mile = Depreciation / annual car mileage x 100

For a Renault ClioAnnual Running Cost = (£5500 - £3000) / 3 = £833Cost per mile = £833 / 12,000 x 100 = 7p

Running Cost so far = 20.9p/mile or £2503 a year

So there you have it! To run a Renault Clio costs just over £2500 pounds a year, or £208 a month. So the running costs aren't quite as bad as mortgage payments, but they are still pretty significant..

Note that a Renault Clio is a very cheap car to run, so don't be surprised if you work out that your running costs are more than twice this figure. But don't forget, no matter what the running cost of your car is, please let us know!