Car Ownership True Cost Calculator: How Much Does Your Car Really Cost Per Year?

At Savzz, we help people understand where their money goes and find ways to spend less. Most people know roughly what their car costs them in fuel and insurance. Almost nobody has added up the full picture: depreciation, road tax, MOT, servicing, repairs, finance interest, breakdown cover, and parking all sitting alongside fuel and insurance in one honest total.

That full total is almost always higher than people expect. This calculator puts every cost in one place so you can see the real monthly and annual figure, the cost per mile you actually drive, and where the biggest savings are available.

Who Is This Calculator For?

This tool is useful for anyone who owns or is considering buying a car in the UK. It is especially helpful if you are:

• Thinking about buying a car and want to understand the full annual running cost before committing, not just the purchase price
• Already a car owner who has never added up every cost in one place and wants to see the real monthly figure
• Someone on car finance who wants to see the total interest they are paying over the term added into the full ownership cost
• Anyone comparing the cost of keeping their current car against buying something newer or more fuel efficient
• A new driver working out whether they can realistically afford to run a car alongside rent, food, and other outgoings
• Someone considering switching to an electric vehicle and wanting a clear baseline of what their current petrol or diesel car costs before comparing

Who Is This Calculator Not Suitable For?

• Business car buyers and fleet managers. The calculator covers personal car ownership costs for private individuals. Business mileage, company car tax, and fleet pricing all work differently.
• Anyone needing a precise insurance quote. The insurance field uses a typical UK average as a default. Actual insurance varies enormously by driver age, vehicle, location, and driving history. Always get a proper quote rather than relying on an average.
• Classic car or specialist vehicle owners. The depreciation and running cost defaults are based on modern everyday cars. Classic cars can appreciate in value and have very different servicing and insurance costs.

How to Use the Car Ownership True Cost Calculator

Start by entering your car’s purchase price or current market value, how many years you plan to keep it, and your annual mileage. Then select your fuel type: petrol, diesel, hybrid, or electric. The fuel fields update based on what you choose.

Work through the fixed annual costs section. Each field has a typical UK default but you should edit these to match what you actually pay. Use the Skip button on anything that does not apply, for example parking costs if you park for free at home and at work.

If you are on finance, toggle the finance section on and enter your loan amount, APR, and term length. The calculator works out the total interest you are paying and adds the annual cost to your total.

The results update instantly as you go, showing your monthly cost, annual cost, cost per mile, and total ownership cost over the full period you plan to keep the car.

What Does It Really Cost to Own a Car in the UK?

According to research from the AA’s annual motoring costs survey, the average UK driver spends somewhere between £3,000 and £5,000 per year running a car depending on the vehicle size and annual mileage. When finance costs are included for drivers buying on PCP or hire purchase, the figure rises further.

Here is what a realistic breakdown looks like for a typical private car in the UK in 2026:

Depreciation: the biggest cost nobody talks about. A car bought for £12,000 and kept for four years loses around £3,000 in value per year on average, depending on make, model, and condition. This is money that leaves your pocket whether you think about it or not. It is the difference between what you paid for the car and what you can sell it for, divided by the years you owned it. For many drivers, depreciation is the single largest annual car cost, bigger than fuel, bigger than insurance. The calculator uses your purchase price and ownership period to work this out automatically.

Fuel: around £1,200 to £2,500 per year depending on fuel type, MPG, annual mileage, and current prices. A petrol car achieving 40MPG driven 8,000 miles per year costs around £1,360 per year in fuel at 147p per litre. A diesel car achieving 50MPG over the same mileage costs around £1,120 per year at 153p per litre. An EV achieving 3.5 miles per kWh charged at 24p per kWh costs around £550 per year for the same 8,000 miles.

Insurance: £500 to £1,200 per year for a typical UK driver on comprehensive cover. Younger drivers pay considerably more. The UK average for comprehensive car insurance in 2026 is around £800 per year though this has risen from previous years due to repair cost inflation.

Road tax: £0 to £620 per year depending on CO2 emissions and vehicle age. Zero emission vehicles registered before April 2025 were exempt from road tax but from April 2025 EVs became taxable. Most petrol and diesel cars pay between £180 and £620 per year.

MOT: around £55 per year once a car is three years old. The maximum official MOT fee is £54.85. Any repairs identified during the MOT are charged on top of the test fee.

Servicing: £150 to £400 per year depending on whether the car needs a minor or major service. Most cars alternate between the two annually, averaging around £250 per year over time.

Depreciation: The Car Cost Most People Ignore

Depreciation is the most significant cost of car ownership for most people and the one that gets talked about the least. If you buy a car for £15,000 and sell it four years later for £7,000, you have spent £8,000 on depreciation alone, £2,000 per year, regardless of what you spent on fuel, insurance, or anything else.

The rate of depreciation varies enormously by make, model, and condition. As a rough guide:

New cars lose around 15% to 25% of their value in the first year of ownership. A brand new £25,000 car can be worth £18,000 to £21,000 by the time it is twelve months old.

After the first year, depreciation slows to around 10% to 15% per year for most mainstream models.

The implication of this for car buyers is straightforward. A car that is two to three years old has already absorbed the steepest part of its depreciation curve. Buying a two-year-old car rather than a brand new equivalent really reduces the annual depreciation cost you absorb as the owner. For someone keeping the car for four years, the total depreciation cost on a two-year-old car bought for £12,000 is likely to be considerably lower than the same four-year period starting from a £18,000 new car.

The calculator uses your purchase price and planned ownership period to produce an annual depreciation figure. It is a straight-line estimate rather than a compound calculation but it gives you a realistic sense of the annual cost that most car cost tools overlook entirely.

The Real Cost of Driving Per Mile

The cost per mile figure in the calculator is one of the most useful outputs and one most drivers have never calculated for their specific car.

At typical UK costs, driving a petrol car works out to somewhere between 30p and 60p per mile when all ownership costs are included, not just fuel. Most people think of driving costs purely in terms of petrol money and dramatically underestimate the true per-mile figure.

Here is why the cost per mile matters in practice:

A 20-mile round trip commute driven five days per week over a full year is 5,200 miles. At 40p per mile in true ownership costs, that commute costs around £2,080 per year, just for the commute alone.

When comparing whether to drive somewhere or take public transport, the fair comparison is not petrol cost alone. It is the full per-mile cost including the share of insurance, depreciation, servicing, and all other ownership costs that accumulates with each mile driven. On that basis, public transport is often considerably cheaper than most drivers realise.

This is not an argument against driving. It is an argument for knowing what driving actually costs so the comparison is honest.

Car Finance: How Much Is It Really Costing You?

Around 90% of new cars in the UK are bought on some form of finance according to the Finance and Leasing Association. PCP (Personal Contract Purchase) is the most common type, followed by hire purchase and personal loans.

The monthly payment on a car finance deal is the figure most buyers focus on. The total interest paid over the full term is the figure that tells you what the finance actually costs.

On a £10,000 loan at 8.9% APR over 48 months, the monthly payment is around £248. The total paid over the term is around £11,904, meaning the finance costs around £1,904 in interest on top of the original loan. Spread over four years that is around £476 per year in interest, a meaningful addition to the annual ownership cost that often gets left out of running cost calculations.

The calculator’s finance section adds this annual interest cost into your overall total so the figure you see reflects the real cost of ownership including what you are paying to borrow the money.

Petrol vs Diesel vs Electric: Which Costs the Most to Run?

The answer depends on your mileage, your home charging setup, and your specific car. Here is a simple comparison based on typical UK figures in 2026:

Petrol is the most common choice and offers reasonable running costs for moderate mileage. At 40MPG and 147p per litre, an 8,000 mile per year driver spends around £1,360 on fuel. Insurance is typically lower for petrol than diesel on equivalent models.

Diesel is more fuel-efficient than petrol for higher-mileage drivers. At 50MPG and 153p per litre, the same 8,000 miles costs around £1,120. For drivers covering 15,000 miles or more per year, the fuel saving over petrol is meaningful. For lower mileage drivers, the fuel saving rarely justifies the typically higher purchase price and insurance premium.

Electric has the lowest fuel cost per mile of any fuel type for drivers who charge primarily at home. At 3.5 miles per kWh and 24p per kWh, 8,000 miles costs around £549, a saving of around £811 per year versus a comparable petrol car at the same mileage. The saving is smaller for drivers who rely on public charging, where per-kWh costs are typically higher than home rates.

The full picture on EVs includes higher purchase prices for equivalent models, potentially lower insurance costs as the market matures, very low servicing costs due to fewer moving parts, and road tax that now applies to EVs registered from April 2025. Running the EV figures through the calculator alongside the petrol figures for a direct comparison is the most useful way to see whether switching makes financial sense for your specific situation.

How to Reduce Your Annual Car Costs

• Shop around for insurance every year without exception. Auto-renewing car insurance is one of the most reliably expensive financial habits in the UK. Switching insurer at renewal saves the average driver £100 to £300 per year for the same level of cover. Set a calendar reminder for two weeks before your renewal date to compare the market.
• Consider a two or three year old car rather than brand new. The steepest depreciation on any car happens in the first one to two years. Buying a car that has already gone through that initial drop means someone else has absorbed the largest part of the depreciation and you benefit from a lower purchase price with several years of life ahead.
• Keep tyres properly inflated. Under-inflated tyres increase fuel consumption by around 1% to 3% for every 10 PSI below the recommended pressure. At current fuel prices, that adds up to a meaningful annual cost for drivers who let tyre pressure drift.
• Drive smoothly and anticipate junctions. Accelerating hard and braking late produces worse fuel economy than smooth anticipatory driving. The difference between aggressive and smooth driving can be 10% to 20% in fuel consumption on the same journey.
• Get multiple quotes for servicing and repairs. Franchised dealerships are typically the most expensive option for routine servicing. Independent garages and fast-fit chains often offer the same work for 20% to 40% less. For MOTs, comparing local test centres takes minutes and can save £20 to £30 per test.
• Check Savzz before buying anything car-related. Our automotive discount codes page lists working deals on car accessories, maintenance products, and motoring services. Saving on the purchases you make anyway reduces the annual running cost without changing anything about how you drive.

The Hidden Costs of Car Ownership Most People Miss

The costs in the calculator cover the main categories but a few additional ones catch drivers off guard:

Tyre replacement. A full set of quality tyres for a typical family car costs £300 to £600 fitted. Most drivers replace at least two tyres per year on average. This is often lumped into the general repairs estimate but it is worth thinking about separately, particularly if you are buying a car with large or low-profile tyres where replacements cost considerably more than average.

Windscreen repair and replacement. A chipped windscreen can usually be repaired for free under most comprehensive insurance policies but a full replacement can cost £200 to £600. Many drivers use insurance for windscreen replacement without realising it affects their claims history.

Parking fines. Easy to overlook as a running cost but for drivers in cities, occasional parking fines add a real annual cost. Including a modest estimate in the repairs and maintenance category gives a more honest annual total.

Accessories and upgrades. Dash cameras, mats, storage solutions, cleaning products, phone mounts: these small purchases accumulate into a meaningful annual spend for most car owners.

The Smarter Way to Own a Car: Know the Cost, Then Save on What You Need

The calculator gives you the honest annual and lifetime picture. Once you know what your car costs, the next step is making sure you are not overpaying on the things you buy to run it.

Browse our automotive discount codes for current deals on car accessories, parts, servicing offers, and motoring products from UK retailers. As we add more retailers to this category, the range of available codes will grow. Check back regularly.

Frequently Asked Questions

How much does it cost to run a car in the UK per year?

The AA’s motoring costs research puts the average annual cost of running a typical medium-sized petrol car at around £3,500 to £5,000 per year including depreciation, fuel, insurance, tax, MOT, and servicing. Finance costs, higher insurance premiums for younger drivers, and higher mileage all push the figure above this range. Use the calculator above for a figure based on your specific car and costs.

What is the biggest cost of owning a car?

For most car owners, depreciation is the largest single annual cost though it is also the least visible because it does not involve writing a cheque or making a direct payment. Insurance is the second largest fixed cost for most drivers. Fuel is the most variable cost and the one most closely linked to annual mileage.

How much does car insurance cost per year in the UK?

The average cost of comprehensive car insurance in the UK in 2026 is around £800 per year for a typical adult driver. Younger drivers under 25 pay considerably more, often £1,500 to £3,000 or higher for new drivers. Drivers over 25 with a clean licence and several years of no-claims discount typically pay between £400 and £700 per year for comprehensive cover on a mainstream car.

How do I calculate my car’s depreciation?

The simplest method is to take the purchase price, subtract the estimated sale value at the end of your planned ownership period, and divide by the number of years. For example, a car bought for £14,000 and expected to sell for £7,000 after four years has a depreciation cost of £1,750 per year. The calculator uses your purchase price and planned ownership years to produce this figure automatically.

Is it cheaper to buy a used car or new?

For most private buyers, a car that is two to three years old offers better value than an equivalent new car because the steepest depreciation has already happened. The used car costs less to buy and depreciates more slowly from the point of purchase. The trade-off is a shorter remaining manufacturer warranty and potentially fewer years before bigger maintenance costs arise. For drivers who keep cars for five years or more, a two-year-old used car is typically more cost-effective than new.

How much does an electric car cost to run per year?

An EV driven 8,000 miles per year and charged primarily at home at 24p per kWh costs around £550 per year in fuel, compared to around £1,360 for a comparable petrol car at 40MPG. Servicing costs for EVs are lower due to fewer moving parts and no oil changes. Insurance costs are broadly similar to petrol equivalents though some models carry higher premiums due to repair costs. Depreciation on EVs is currently harder to predict due to rapidly evolving technology and changing used car valuations.

Who built this calculator?

The Savzz Car Ownership True Cost Calculator was built by the team at Savzz.co.uk, a UK discount code and money-saving site. We built it because most car running cost tools only show fuel and insurance without the full picture. This calculator includes depreciation, finance interest, and all fixed costs in one place, and shows the cost per mile figure that makes it easy to compare driving against other transport options. It is completely free to use with no sign-up is needed.