What are the costs of owning a car?

The decision to own a car in the UK is a significant one, impacting both the convenience of travel and the household budget.

In a recent Facebook post, we asked our audience what was the biggest expense they felt when owning a car.

The discussion that unfolded showed a wide range of expenses, with 4-5 categories illuminating the key expenses faced by British car owners. These included:

• Insurance
• Fuel
• Maintenance & repairs
• Tax
• And more

The insights gained from this survey provide a window into the diverse aspects of car maintenance and use that impact their wallets.

The Surge in Electric Vehicle Ownership

The electric vehicle market in the UK has witnessed remarkable growth.

As of late 2023, the UK roads saw around 975,000 fully electric cars and 590,000 plug-in hybrids. This surge reflects a consumer shift away from traditional petrol and diesel vehicles.

Notably, in the first quarter of 2023, over half of the UK's vehicle sales were EVs, signalling a major shift in consumer preferences​​​​.

Financial Differences in Vehicle Types

When it comes to choosing a vehicle, the type of car significantly influences the overall cost of ownership.

Electric vehicles, while often more expensive upfront, tend to be more cost-effective in the long run. Especially with Government incentives in place to encourage the use of EVs.

The average running cost for an electric car is about 9p per mile, compared to 18p per mile for petrol cars. This difference implies potential savings of £13,500 over the average car’s lifetime of 150,000 miles​​.

Car Insurance Costs: A Major Factor

Insurance remains one of the most significant annual expenses for car owners in the UK, averaging around £561.

This sentiment was echoed often in the Facebook discussion. As one respondent, with Adam L, succinctly put it, "Insurance!" echoing a sentiment shared by many car owners.  

Factors influencing insurance costs include the vehicle type, driver’s age, driving history, and location.

Electric vehicles can sometimes be more expensive to insure due to their higher purchase price and the cost of battery replacement. However, some insurers offer discounts for EVs due to their safety features and environmental benefits​​.

Car Maintenance and Repairs: Electric vs Traditional 

Maintenance costs are an essential aspect of car ownership. No matter what type of vehicle you own.

Traditional vehicles average about £273 per year in maintenance and unexpected repairs.

That is normally before you start to include the price of new tyres as well. Bet they tyres for ICE vehicles, or EV tyres.

In contrast, electric vehicles typically require less maintenance due to fewer moving parts and less wear and tear, potentially reducing long-term costs.

Environmental Impact and Carbon Emissions

The environmental impact of vehicles is a growing concern. Electric vehicles offer a significant advantage in this area.

In 2022, electric drivers in the UK prevented around 8.4 million tonnes of CO2e emissions.

With the average person in the UK driving 6,800 miles per year, switching to an electric car on a 100% green tariff can substantially reduce one’s carbon footprint​​.

Fuel Expenses: The Ongoing Cost

Fuel costs vary depending on the vehicle type and usage. For petrol and diesel cars, fuel costs average about £1,400 annually.

Another point that came up often. With Alan H stating, "Diesel. And half of it is tax," in the Facebook comments.

The cost-effectiveness of electric vehicles is more pronounced in this area, with significantly lower per-mile costs compared to traditional fuel vehicles​​​​.

The Growing Infrastructure for Electric Vehicles

The UK’s infrastructure for electric vehicles is expanding rapidly, with over 44,020 public charging points as of mid-2023.

This development is crucial for the convenience of owning an electric vehicle and addresses one of the major concerns potential EV buyers have - the availability of charging stations​​.

Tax and Warranty Costs: Overlooked but Essential

Car tax and warranty are additional expenses that contribute to the overall cost of car ownership.

The survey included comments like "The multiple Taxation on Fuel followed by Road Tax," underscoring the impact of government policies on car ownership costs.

Understanding the tax rates and choosing the right warranty plan can help mitigate these costs.

Electric vehicles often benefit from lower taxes and government incentives, making them more attractive in terms of overall expenses.

Cost of owning and running a car

The transition to electric vehicles, alongside traditional car ownership, presents a new financial landscape for UK drivers.

Balancing the benefits of personal mobility with its financial implications is key to ensuring that car ownership aligns with individual needs and financial capacity.

As the automotive landscape continues to evolve, staying informed and adaptable is crucial for successful and sustainable car ownership.