What are the costs of owning a car?

In a recent Facebook post, we asked our audience what the biggest expense was when owning a car.
The discussion that unfolded showed a wide range of expenses. However, there was 4 key expense categories that came up regularly. 

These categories included:

• Insurance costs
• Fuel prices
• Maintenance & repairs bills
• Taxation

Financial Differences in Vehicles

The category of a car has a big influence on the overall cost of owning a vehicle.

Electric vehicles, although they can tend to be more expensive upfront, can prove to be more cost-effective over time. 

Especially with Government incentives to encourage the use and uptake of EVs

The average running cost for an electric car is about 9p per mile. This is compared to 18p per mile for people with petrol cars.

Car Insurance Costs

Insurance remains one of the most significant annual expenses. With it averaging around £561.

This sentiment came up in the Facebook discussion. 

One respondent, Adam L simply answering "Insurance!". A sentiment that was shared by many other car owners. 

Electric vehicles can sometimes be more expensive to insure. Thanks to their higher purchase price – and the potential cost of replacing the battery.

Some insurers are now offering discounts for EVs though. So it will be interesting to see if this practise grows.

Car Maintenance and Repairs 

Maintenance costs are an essential aspect of car ownership. Traditional vehicles average about £273 per year in maintenance. That is before you include the price of buying new tyres. On the other side of the coin, electric vehicles typically require less maintenance. Due to fewer moving parts..

Environmental Impact

The environmental impact of vehicles has been a long-time concern. 

It is estimated that In 2022, EVs prevented around 8.4 million tonnes of CO2 emissions.

On average, motorists in the UK drive around 6,800 miles each year. If more people switched to an electric car on a 100% green tariff – you could substantially reduce your carbon footprint.

Fuel Expenses

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

Another discussion point that that came up often. Alan H stated, "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. 

Electric Vehicle Infrastructure

The UK’s infrastructure for electric vehicles is expanding. At the time of writing there are around 44,020 public charging points.

The continued roll out of charging stations is crucial for the uptake of motorists owning an electric vehicle. 

Tax and Warranty Costs

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

Our Facebook post was commented on many times along these lines. With one person writing "the multiple Taxation on Fuel followed by Road Tax".

Understanding the tax rates and how different vehicles are affected can help to lower these costs. Especially when it comes time to choose a new car. 

Electric vehicles often benefit from lower taxes. And government incentives.

Cost of owning a car

The transition to electric vehicles, alongside traditional cars, presents a new financial landscape.

Balancing the benefits with financial implications is key to ensuring car ownership does not become a financial black hole.