Looking to buy a car? There's more to it than just the price. Let's break down the real costs of owning a car so you're fully prepared.
From the initial price to insurance, tax, and more, we'll cover everything you need to know about the expenses that come with owning a car.
What are the costs of owning a car?
When buying a car there are various costs that you need to take into account. Unfortunately the cost of owning a car doesn’t stop at the price of the car itself.
Below are the expenses you will need to consider and budget for when purchasing a car.
First, the cost of the car
The first is of course the cost of the car itself.
Whilst many of us want a brand new car, it’s not always the most practical investment. Yes, it would be luxurious to own a brand spanking new set of wheels, but the car will lose value as soon as you drive it off the forecourt.
It’s like buying a new home – you are paying a premium for it to be brand new, a premium you won’t ever get back. Unlike houses though, whose values predominantly go up over time, a car is the opposite. Its value will decline over time.
Because of this, it can be much more worthwhile looking at used cars instead.
Buying privately can be a bit of a gamble, so it’s worth checking out local car dealerships instead. Many will provide a fresh MOT and service on a vehicle and even some extras such as a cam belt change if requested or needed.
You’re also more likely to have a warranty or some sort of guarantee with the car to cover the first few months. If there’s a major issue they should have known about, then simply return it for them to cover the costs of the work.
Be sure to ask about any guarantees or warranties at the time of the purchase. If you’re looking for a trustworthy dealer in Brighton to buy used cars, then check out KAP Motors for quality used cars.
Buying a used vehicle will save a significant amount of money compared to buying a brand new car. But you still need to fund it, so what are your options?
Ideally you will save up to pay for your new (or used) car outright, but cars are pretty expensive, and sometimes you need them quickly and don't have time to save up. In this case there are a variety of options from leasing a car to looking into car finance choices. If you're worried you have bad credit then check out this article on Get Me Car Finance about how to get car finance if you have bad credit.
Car insurance is something you are legally required to have.
Luckily it doesn’t have to be a surprise cost as you can get quotes with no obligation before you purchase a car. Simply find out the car model and make, or even better the registration number, and search online for quotes.
This will give you a good idea of how much money you’ll be spending per year or month on insurance. If you choose to pay annually then it’s usually a bit cheaper than spreading the payments out monthly.
Once you are ready to buy your insurance then always check online comparison sites like Money Supermarket and Confused to compare prices and get the best deal. Car insurance website Mustard promise to beat your cheapest online quote, so give them a try too!
You can also get cashback for most of the popular car insurance providers and even when purchasing car insurance through a cashback site. Give Top Cashback a try and Quidco and you might save even more money on your car insurance even once you've found the best quote!
Make sure you get a new quote every year as your renewal car insurance price will rarely be the best price available to you.
In the UK you must pay for car tax if your vehicle is on the road, even if stationary. If your car is not being driven then you need to declare it as SORN (Statutory Off Road Notification) with the DVLA and ensure it is not parked on a public road for the duration of the SORN. Otherwise you will need to properly tax the vehicle.
Tax can be paid yearly or monthly by direct debit. There are no extra costs to pay monthly and the tax will continue to be paid without having to remember to renew.
The tax is dependent on a cars CO2 emissions and is anywhere from £0 to £2000 per year according to the gov.uk website.
To ensure your car runs smoothly and to avoid any issues or unnecessary breakdowns, it is vital to have a car regularly serviced.
A full service once per year or every 10000 miles is recommended. You can also have mini services in-between which are a good idea if you travel lots or are planning a long journey.
Though you’ll have upfront costs for services, they could save money in the long run by preventing a problem with the car as you’ll be properly maintaining it.
Many services are priced based on the engine size, so the larger engine your car has the higher the cost of each service. Do take this extra cost into account when purchasing a vehicle.
The maximum fee for a yearly MOT, at the time of writing, is £54.85. This is the maximum fee a centre can charge according to the gov.uk website.
However, you can arrange your MOT much cheaper. I’ve managed to use discount codes and cashback to save a great deal every year on my MOT.
Your car will need to pass its MOT each year to be legally driven on the roads, so factor in the cost of the test itself and any potential repairs when considering a car purchase.
Read my blog post to find out how to save on your MOT - How to get the cheapest MOT
Every car needs fuel in one form or another, even new electric cars. Most cars use petrol and diesel and this comes at a fluctuating cost.
Some cars are more fuel efficient than others so it’s worth doing you research to find out how much fuel your potential car will guzzle and at what rate to your wallet! It may even be worth looking into purchasing a fuel card to help you save money, check out iCompario for a range of fuel card options.
If money and cost is a factor then it's always wise to do some research when buying a car and purchase a reliable fuel efficient car that will save you more money in the long run.
The price of a car doesn’t stop on the forecourt and it’s sensible to factor in all the ongoing costs to ensure you can afford to run the car you purchase.
Thinking of repairs? Save money and know how to fix small dents on your vehicle