Get on the road without crashing your bank balance: a rookies guide to car running costs
For young and first-time drivers, running a car is likely the most expensive thing you’ll pay for, aside from what you spend on renting and accommodation.
If you’re new to it all, the costs associated with keeping your car on the road will come as an unfamiliar and nasty shock. And the down side is that while there are some great hacks and savvy tactics which will help keep your running costs down, there’s no avoiding the sizable dent that keeping your car on the road will make on your finances. Britain has earned its crown as the most expensive place on earth to run a car.
The amount you end up paying will depend on so many variables, like what car you drive and how often you drive it, along with your age and driving experience for insurance purposes – this can make estimating what you’re likely to pay without the use of a Running Cost Calculator difficult. However the figures from the AA and Auto Express’ Driver Power 2015 survey showed that a new £18,000 car will cost on average £2,559 to run per year, based on a petrol model covering 10,000 miles and returning 45mpg.
Bearing in mind the unwelcome costs that you’ll find yourself paying out for your car, it’s important to be aware of what exactly you’ll have to cough up for – that’s why we’ve taken it upon ourselves to give you a heads up on each of the key running costs that comes with motoring.
Fuel consumption & efficiency
Fuel consumption, along with safety and reliability, is among the main considerations for most people when they are choosing a car. The reason for this is obvious – fuelling a car is really, really expensive!
The price of petrol at the pump may have fallen to its lowest price in years, but that doesn’t stop Britain from being one of the most expensive countries in the world to re-fill your car.
The cost of fuelling your car will be one of your biggest motoring expenses, and sadly there isn’t much we can do about it. However whilst we cannot change the price of a litre of fuel, what we can do is be mindful of how much fuel we use. Here’s a few things to consider if you’re looking to keep your petrol or diesel costs down.
One of the key ways of keeping your fuel costs down is to consider the fuel consumption of a car before handing over your cash.
There’s a simple rule: the bigger your engine, the more fuel it will use in general. In other words, if you want to save money, don’t buy a 2.0litre turbo – instead, buy a smaller low-powered hatchback, a simply a car with a smaller engine which guzzles less petrol.
Mind your speed!
It’s a good idea for you and everybody else to do this anyway, but keeping your speed down when you drive will dramatically reduce the amount of fuel you use. As many have found the hard way, a car drinks a lot more fuel when you’re driving over 60mph than it does at lower speeds.
Ideally, buy a car which is low-weight, and also be sure not to load up your car with anything that will add substantial weight – the heavier your car, the more fuel it will use.
Petrol vs Diesel
As a general rule, diesel cars are more fuel efficient than petrol ones. On the other hand, diesel cars tend to cost more to buy and service than petrol ones, plus filling your tank will cost 30p more per gallon (£3.30 extra on average), but the diesel will go farther on every gallon of fuel.
Refill at supermarkets
Supermarkets rely on competitive pricing to stay in business, and you can benefit from this on the forecourt. They often offer the best fuel prices to be found, and what’s more there are other benefits too – you can build up reward points or pick up vouchers which will cut the cost of filling a tank of petrol.
In case you want to check the prices out of petrol in your area today, visit PetrolPrices.com
Before you can take to the road you’ll need to get your car insured, and the downside is that insurance premiums don’t come cheap for young and first-time drivers – don’t be too shocked if you’re quoted over £1,000+ for your first year’s cover if you’re new to the road.
But as with fuelling your car, whilst you can’t avoid the fact that you’ll have to pay out for a car insurance policy, what you can do is take steps to ensure that you keep the cost as low as possible. For starters, take the cost of car insurance into account when you’re choosing a car to buy in the first place. There are 50 different car insurance groupings which a car can fall into, depending on its engine type, size, acceleration and speed, and its age and safety features, among other things – all factors which insurers use to determine the level of risk that driving the car poses to them. To find out more about car insurance groupings, this AA article might come in handy.
There are three car insurance options available to you: third-party insurance cover, third-party, fire & theft and fully comprehensive cover. Third-party insurance is the minimum required by law, and will provide basic cover which includes damage to property or injury to others so long as you’re not at fault. This package won’t cover repairs that need to be made to your vehicle, damage by fire of theft. The middle option is pretty self-explanatory. And fully comprehensive insurance fully covers damage to both your car and a third-party’s, along with other covers and benefits.
This won’t be immediately applicable to you if you’re buying a brand new car. However if your car is over 3-years old, you’ll have to put your car through an MOT – a yearly test which is designed to ensure your car is safe to go on the road.
The government’s standard cost for an MOT is £54.85 for a car, although you may be able to find a cheaper deal if you shop around. However if upon inspecting your car a garage finds that any parts need replacing, it goes without saying that the £54.85 won’t cover it!
To find out more about MOT tests, the Money Advice Service explains the process more here.
Maintenance, servicing & buying replacement parts
According to the RAC, it costs £472 on average to maintain a used car over the span of a year – be prepared to pay a lot more than this if you’re unlucky and pick a car where everything starts to fail and fall apart!
To save yourself a lot of money, stress and heartache, it’s a wise move to look at used car warranty options – a package which will offer you cover on certain types of car repairs, and sometimes the cost of your yearly service and MOT. Different used car warranty options have different cover options and criteria, however, so be sure you’re on what you’ll be covered on and what you won’t.
Otherwise known as VED, car tax must be paid on all UK-registered vehicles that are driven on public roads. There’s no getting out of paying it, unless you have a car which is extremely eco-friendly, and it’ll cost you up to £1,000 or so a year.
To find out more about car tax bands, click here for further information from the Money Advice Service.
Sooner or later at some stage in your driving life, you’re going to experience a car breakdown. It’s rubbish but it’s a fact of life, and it’ll probably happen more than once – this is where breakdown cover comes in.
The premise behind it is that if you break down, by getting breakdown cover with the likes of the AA you can be rest assured that an engineer will come to your rescue. If your car can’t be fixed at the roadside, they will tow it away for you so that it can be repaired and provide you with a courtesy car, even if you’re stranded in Europe. When you look at it like this and compare it to how utterly awful life would be to break down without breakdown cover, there’s not a lot to think about – it’s not a legal requirement, but breakdown cover just makes sense.
Of course the devil is in the detail – what benefits you’ll get depends on what level of cover you have. And the higher the level of cover, the higher cost. So when you’re shopping around for breakdown cover, as always, check what deals offer what cover and pick the package that’s best for you.
The moral of the story: shop savvy to cut your car running costs
Shop smart, shop around, and do your homework – as with shopping for anything, these three things are key to saving money. And make no mistake about it, you could save hundreds and hundreds of pounds over the course of a year.
Your wedding doesn’t have to cost the earth
We look back at a few blockbuster classics and their budgets from years gone by.
What hidden costs are involved when buying a house?
Money Life explores exactly how much premier league promotion is worth