For many of us, life without a car simply doesn’t work. Whether it’s for the work commute, shuttling the kids to school on time or getting to and from the shops, our four-wheeled friends make a lot of life’s important everyday tasks much easier.
Of course, that comes at a cost and a significant one at that, but how much exactly? It’s incredibly easy to lose track of how much a vehicle costs to run; most of the time it simply comes down to not acknowledging all of the cost elements attached to running a car.
Here are four key areas of spending which will help you to better understand how much a car truly costs to keep on the road.
The Car Itself
Buying a car represents one of life’s bigger financial outlays. The figure differs vastly from vehicle to vehicle based on age, condition, performance specifications, brand and even colour.
You won’t find many new cars below the £10,000 mark, with the very cheapest being the Dacia Sandero at £6,995, which costs £1,500 less than the second placed option. In 2017, the average cost of a new small car was £10,635-£12,715, rising to £16,500-£20,000 for a medium option.
Of course, many buyers turn to second hand options which, thanks to depreciation, are significantly cheaper than their newer counterparts. The average second hand car in Britain costs £12,967, which is a price that takes into account everything from cheap bangers to dream supercars. Generally, you can get a good used car from a few thousand pounds.
Finance options are also available, which often entail a considerable up-front deposit followed by monthly payments of around £100-£300 across two to four years. If you do choose a finance route, make sure to calculate your full expenditure before going forward.
Insurance & Tax
Upon buying your car, one of the first things you’ll need to do is tax it according to the correct banding. Tax costs are higher for newer vehicles, with fees in the region of £140. Older cars can cost as little as £15-£30, which may play a factor in your decision-making process.
As for insurance, the average premium now sits at £471. Again, this is completely circumstantial; new drivers will often face premiums spanning into four figures, as will those with a high-performance vehicle.
As newer cars are released with more efficient engines, the average fuel efficiency in miles per gallon (mpg) is increasing. The RAC states that new cars in 2017 boasted an average of 51.7mpg and 61.2mpg for petrol and diesel models respectively.
A more realistic target for most drivers is probably around the 45mpg mark. Take a 130p per litre midpoint between petrol and diesel and the average 7,300 miles travelled in the UK a year, and fuel costs come out at just under £960.
For many people, a fuel spend of over £1,000 on the year should not be unexpected.
MOT, Maintenance & Repairs
Drive a new vehicle out of the showroom and you’ll understandably hope to see no maintenance or repair charges on the year. The story with a second hand motor may well be a little different, but this can often depend on luck rather than anything else.
One inevitability is the yearly MOT, which will cost anywhere from £30-£50 in most garages. A yearly service is the next most likely occurrence, often costing around £125. Overall, the RAC suggests annual maintenance costs of £472 for a used vehicle, which is a fairly significant sum of money.
The Total Cost
So, how much does it cost to run a car each year? Whilst it’s difficult to put a finger on an exact figure, Kwik Fit reported average running costs of £1,944 over twelve months, with finance payments totalling an average of £2,712 annually. Rather specifically, Rias proposed costs of £2,600 a year for running a new £18,000 petrol car for 10,000 miles at 45mpg.
Although these figures somewhat differ, it appears you can expect to pay well over £1,000, in fact closer to £2,000, to keep your car on the road without finance costs. Managing the various associated costs may play a significant factor in a buyer’s decision making process, which is why retailers like Fords of Winsford offer buying filters based on the likes of fuel economy and tax brackets.
Everyone’s situation is different, so make sure you’re aware of the potential costs of buying and running a car before making a purchase.
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