Last updated: 4 November 2026. General information for the UK, not financial advice. Figures for the 2026/27 tax year.
Ask most people what their car costs and they’ll tell you the fuel. Maybe the insurance. But a car is a whole stack of bills that arrive at different times of year: road tax, MOT, servicing, tyres, parking, breakdown cover, and the quiet one nobody sees, the value the car loses every year.
Add them up and the monthly cost of running a car is often far more than people think. Here’s how to work out your real car running costs, with 2026/27 UK figures, and 12 practical ways to bring them down.
Quick answer: list every car cost for a year, including insurance, tax, MOT, servicing, tyres, fuel or charging, parking and finance, then divide by 12. For many households, that number is a real eye-opener.
The real cost of running a car: everything to include
| Cost | How often | Where to find it |
|---|---|---|
| Fuel or charging | Weekly | Bank statement or app |
| Insurance | Yearly or monthly | Your renewal letter |
| Road tax (VED) | Yearly, 6-monthly or monthly | GOV.UK or your V5C |
| MOT | Normally yearly from 3 years in Great Britain; 4 in Northern Ireland | Your MOT certificate |
| Servicing | Yearly | Last service receipt |
| Tyres and repairs | When needed | Estimate a yearly amount |
| Breakdown cover | Yearly | Renewal email |
| Parking, tolls and charges | Weekly or monthly | Statements, apps |
| Car finance or lease | Monthly | Your agreement |
| Depreciation | Every year | Compare what you paid with what it’s worth now |
Road tax (VED) in 2026/27
For most cars registered from 1 April 2017, the standard rate of vehicle tax is £200 a year if you pay in one go, or £210 if you pay by 12 monthly Direct Debits (GOV.UK). Electric cars now pay the same standard rate.
- First year: the rate in the first year depends on the car’s CO2 emissions. Zero-emission cars pay £10.
- Expensive car supplement: if the car’s list price was over £40,000 (or over £50,000 for an electric car), you pay an extra £440 a year for 5 years, from the second time the car is taxed. Check GOV.UK for the exact rules on your car, especially electric cars registered between 1 April 2025 and 31 March 2026.
Money tip: paying in one go is £10 cheaper than 12 monthly payments. Add road tax to your sinking funds so it’s ready when it’s due.
MOT
In England, Scotland and Wales, cars need an MOT once they’re 3 years old, then every year (in Northern Ireland, normally from 4 years old; some cars have temporary exemption certificates, so check your vehicle’s current expiry date). The maximum a test centre in England, Scotland or Wales can charge for a car MOT is £54.85, and many charge less (GOV.UK). You can get your MOT up to a month (minus a day) before it runs out and keep the same renewal date.
Fuel: work out your real cost
Here’s a simple way to work out your yearly fuel cost:
- Miles a year ÷ your car’s mpg = gallons used.
- Gallons × 4.546 = litres.
- Litres × price per litre = yearly fuel cost.
Example (made-up round numbers): 8,000 miles a year in a car that does 45mpg is about 178 gallons, or about 808 litres. At 145p a litre, that’s about £1,172 a year, or £98 a month. Try your own figures in my fuel and commute cost calculator.
Electric car charging costs
If you have an electric car, the cost depends hugely on where you charge.
- At home on a standard tariff: at Ofgem’s average price cap rate of 26.32p per kWh (1 October to 31 December 2026), 8,000 miles at 3.5 miles per kWh is about 2,286kWh, or roughly £600 a year. Your own rate depends on your tariff and region.
- At home on an off-peak tariff: some suppliers offer much cheaper electricity overnight, which can bring this down a lot. You usually need a smart meter. (See are smart meters worth it?)
- Public rapid chargers: usually cost much more per kWh than charging at home.
What we do: we have an electric car and charge it overnight on an off-peak tariff using our supplier’s app. It’s one of the biggest savings we’ve made on getting around.
If your employer offers an electric car through salary sacrifice, try my EV salary sacrifice calculator.
Depreciation: the cost nobody sees
Depreciation is the value your car loses over time. You don’t see a bill for it, but it’s real money. The RAC estimates that, on average, carslose 50 to 60% of their value in the first three years (RAC).
That’s why buying a car that’s a few years old, or nearly new, can save a lot. My guide to new vs used cars explains the options.
Your monthly car cost worksheet
Grab last year’s bank statements and fill this in:
| Cost | Per year | Per month (÷ 12) |
|---|---|---|
| Fuel or charging | £ | £ |
| Insurance | £ | £ |
| Road tax | £ | £ |
| MOT | £ | £ |
| Servicing, tyres, repairs | £ | £ |
| Breakdown cover | £ | £ |
| Parking and charges | £ | £ |
| Finance or lease | £ | £ |
| Total | £ | £ |
This worksheet totals cash payments. To compare the economic cost of owning a car, add depreciation and finance interest or fees, but do not add depreciation on top of loan capital repayments or lease payments: that can double-count the vehicle’s cost.
Then compare it with the cost of the alternatives: bus passes, train tickets, a bike, or a car club for the odd trip.
12 ways to cut your car running costs
Insurance and admin
- Never auto-renew your insurance. Compare prices about three to four weeks before renewal. Which? reported Go.Compare research on comprehensive annual policies sold in April to June 2025, finding that buying 26 days before the start date cost a median of about £355, compared with £493 on the day itself (Which?). I saved £400 on my own renewal by comparing instead of accepting the quote. Here’s how I saved £400 on car insurance.
- Pay insurance and road tax yearly if you can. Monthly payments often cost more.
- Check your breakdown cover. You may already have it through a bank account or your car insurance. Don’t pay twice.
- Shop around for your MOT. The fee is a maximum, not a set price.
Fuel
- Compare pump prices. Under the government’s Fuel Finder scheme, petrol stations report price changes, and the prices appear in free apps and on maps. The government estimates this could save car-owning households about £40 a year (GOV.UK).
- Drive smoothly. Gentle acceleration and braking, and sticking to the speed limit, use less fuel.
- Check your tyre pressures monthly. Under-inflated tyres use more fuel and wear faster.
- Take out the extra weight and remove roof boxes and racks when you’re not using them.
- Combine short trips. A cold engine uses more fuel.
Bigger changes
- Charge at home off-peak if you have an electric car.
- Could you manage with one car? Or no car? We didn’t have a car for our first two years in the UK and used day tickets and weekly passes instead. A car club or lift-sharing can cover the odd trip.
- Keep your car longer. Each year you keep a reliable car, the depreciation slows down and you put off the cost of the next one.
Car running costs: people also ask
How much does it cost to run a car per month in the UK?
It depends on your car, your mileage, where you live and whether you have finance. Add up fuel, insurance, road tax, MOT, servicing, tyres, parking and finance for a year, then divide by 12. Many people are surprised by the total once depreciation and finance are included.
How much is car tax in 2026/27?
For most cars registered from 1 April 2017, the standard rate is £200 a year in one payment, or £210 by 12 monthly Direct Debits. Cars with a list price over £40,000 (or £50,000 for electric cars) pay an extra £440 a year for 5 years.
Do electric cars pay road tax now?
Yes. Electric cars now pay vehicle tax. Zero-emission cars pay £10 in the first year, then the standard rate. Expensive electric cars may also pay the expensive car supplement.
How much does an MOT cost?
In England, Scotland and Wales, the maximum fee for a car MOT is £54.85, but many test centres charge less, so it’s worth shopping around.
What’s the biggest cost of owning a car?
For many newer cars, it’s depreciation, the value the car loses each year. For older cars, fuel, insurance and repairs usually make up most of the cost.
Summary
- Car running costs include fuel, insurance, road tax, MOT, servicing, tyres, parking, finance and depreciation.
- Road tax for most newer cars is £200 a year in 2026/27 (or £210 a year paid monthly), and an MOT costs up to £54.85.
- The biggest savings come from comparing insurance before renewal, charging or fuelling smartly, and keeping a reliable car longer.
Next step: fill in the worksheet above with last year’s statements. Then put your yearly car costs into a sinking fund so they never catch you out.
General information only. I’m not a financial adviser. Rates and fees change, so check GOV.UK before you rely on them.
Sources (checked 4 November 2026): GOV.UK: vehicle tax rate tables · GOV.UK: MOT fees · GOV.UK: Fuel Finder factsheet · Which?: cheapest day to buy car insurance · RAC: vehicle depreciation · Ofgem: price cap rates