Reviewed by Mustafa Bilgic
Founder, WebCalculator
VED standard rate per gov.uk/vehicle-tax-rate-tables. MOT fee cap per gov.uk. All other costs are user-entered. Not financial advice.
This car running cost calculator adds up every expense of owning and running a car in the UK — fuel, insurance, road tax, MOT, servicing, tyres, depreciation and finance payments. Enter your own figures to see the true total cost per year and per mile.
All ownership costs in one place
Most drivers underestimate the cost of car ownership because they think mainly about fuel. In reality, depreciation is usually the single largest expense — often more than fuel, insurance and servicing combined. The calculator above captures every category so you can see the full picture.
Understanding your cost per mile is particularly useful for deciding whether to drive or take public transport for a journey, comparing cars before buying, or checking whether a mileage allowance covers your actual costs.
| Category | Typical range |
|---|---|
| Fuel (8,000 miles, 40mpg, £1.40/L petrol) | £1,270 |
| Insurance | £400 – £1,200+ |
| Road tax (VED) — standard rate | £200 |
| MOT test fee (cars 3+ years) | £54.85 max |
| MOT repairs (average) | £150 – £400 |
| Servicing + tyres | £300 – £800 |
| Depreciation (3-year-old car) | £1,500 – £4,000 |
| Parking + tolls | £0 – £1,500+ |
VED standard rate source: gov.uk/vehicle-tax-rate-tables. Insurance and depreciation vary enormously by car and driver.
A brand-new car typically loses 15% to 35% of its value in the first year and roughly 50% to 60% over three years. A £30,000 new car might be worth just £12,000 to £15,000 after three years — that is £5,000 to £6,000 per year lost to depreciation alone.
Buying a 2 to 3-year-old car avoids the steepest depreciation curve. From age 3 to 6, depreciation slows to roughly 10% to 15% per year. Cars with strong residual values (Toyotas, Teslas, Land Rovers) depreciate less, while luxury and high-mileage cars depreciate faster.
Your cost per mile is the single most useful number for comparing cars, deciding whether to drive or take the train, and checking if your employer's mileage reimbursement covers your actual expenses. A typical UK car costs 35p to 55p per mile once all expenses are included. The HMRC approved mileage allowance payment (AMAP) rate of 45p per mile for the first 10,000 business miles and 25p thereafter is designed to cover these costs on average — but it is just a guideline, not an individual calculation.
Never auto-renew insurance. Compare quotes every year. Switching saves an average of £200 to £400. Increasing your voluntary excess, paying annually instead of monthly, and keeping a named driver with a clean record all reduce premiums.
Consider an EV. Electric vehicles have no fuel duty, lower VED, zero BIK tax (4% in 2026/27), and far fewer moving parts to service. See the EV charging cost calculator for fuel savings.
Maintain your car. Regular servicing prevents expensive failures. Properly inflated tyres improve fuel economy by up to 3%. A well-maintained car also fetches a better price when you sell it, reducing net depreciation.
Use the vehicle excise duty calculator to check your exact VED band. The car finance calculator shows the total interest cost of a PCP or HP deal, and the company car tax calculator works out the BIK charge for employer-provided vehicles.
The average annual cost of running a car in the UK is roughly £3,500 to £5,500, depending on the car, mileage and where you live. This includes fuel (£1,000-£2,000), insurance (£500-£1,200), road tax (£0-£200), MOT (£55), servicing and repairs (£400-£800), and depreciation which is the largest hidden cost.
Depreciation is typically the largest cost, especially for new or nearly-new cars. A new car loses roughly 15% to 35% of its value in the first year and around 50% to 60% over three years. On a £30,000 new car, three-year depreciation could be £15,000 to £18,000 — far more than fuel, insurance and servicing combined.
Average UK car insurance premiums vary widely by age, location and driving history. Younger drivers pay significantly more. Because premiums change frequently, the calculator lets you enter your own insurance quote rather than using a potentially outdated average figure.
The standard rate of vehicle excise duty for cars registered after April 2017 is £200 per year from April 2025. Zero-emission vehicles pay £10 in the first year, then the standard £200. Cars with a list price over £40,000 pay an additional £440 per year for five years. Source: gov.uk/vehicle-tax-rate-tables.
The maximum MOT fee is set by the government at £54.85 for a car. Many garages charge the full amount, though some offer discounts. MOT is required annually once a car is three years old. Repairs needed to pass the MOT are additional costs that vary widely.
The most impactful steps are buying a fuel-efficient or electric car, shopping around for insurance annually (never auto-renew), reducing unnecessary mileage, keeping tyres properly inflated, and choosing a car with lower depreciation. Buying a 2-3 year old car avoids the steepest depreciation while still being relatively new.
It depends on your usage and preferences. Buying with cash avoids interest costs and you keep the residual value. Leasing (PCP or PCH) has lower monthly payments but you never own the car. For company car drivers, a salary sacrifice lease on an electric vehicle can be very tax-efficient due to the low 4% BIK rate in 2026/27.