Car Running Cost Calculator — the United Kingdom 2026-27
See the true annual cost of keeping your car on the road.
Calculate the true total annual cost of owning and running any car in the United Kingdom. Covers all 8 cost categories: depreciation, fuel, insurance, VED (road tax), servicing, tyres, loan interest, and parking. Supports petrol, diesel, and EV comparison.
Estimates based on UK averages. Depreciation uses the diminishing-value method (15% default). Enter known costs in Standard+ mode to override estimates.
Select the question that matches where you are right now.
Your result shows the estimated annual total cost of car ownership. The category chart shows where your money goes — this is often surprising. Switch to Standard mode to enter your actual insurance, VED (road tax), and servicing amounts for a more accurate total.
Cost per mile is the most useful number for comparing vehicles and usage patterns. High-mileage drivers have a lower £/mile because fixed costs (depreciation, insurance, VED) are spread over more miles. Low-mileage drivers pay more per mile even if their total annual spend is lower. The cost-per-mile curve (Standard mode) shows how your specific number changes at different annual distances.
Fixed costs — depreciation, insurance, VED (road tax) — stay roughly the same regardless of how far you drive. Variable costs — fuel and tyres — scale directly with miles. This means the cheapest cost per mile comes from driving more (spreading fixed costs) but with a fuel-efficient vehicle. Conversely, a very expensive car driven infrequently has a very high cost per mile.
The Simple mode estimates insurance, VED (road tax), and servicing. Switch to Standard mode and enter your actual annual amounts to get a precise total. Use your last insurance renewal notice, DVLA road-tax reminder, and average servicing invoices. This turns the estimate into a true total cost of ownership for your specific vehicle and circumstances.
Depreciation is almost always the largest single cost of car ownership — yet it is invisible until you sell. Here is how to minimise it.
A £40,000 car losing 15% per year loses £6,000 in Year 1 — more than most drivers spend on fuel. In Year 5, the car might be worth £18,000 — a total loss of £22,000 over 5 years. That is £4,400/year, just in depreciation. Compare that to approximately £2,200/year in fuel for average driving. You pay more to own the car than to fuel it.
The steepest depreciation happens in the first 1–3 years — often 35–50% of the purchase price. Buying a 3-year-old car means the original owner absorbed this cliff. You buy at £25,000 what was a £40,000 car, and the remaining depreciation curve is much flatter. Over the next 5 years, you lose £8,000–£12,000 instead of £20,000–£28,000.
Use Advanced mode to change the depreciation rate from the 15% diminishing-value default. Real market depreciation varies dramatically by brand: a Toyota or Honda might only lose 10% per year in market value; a European luxury car might lose 20–25%. You can look up your specific model's historical resale values on Parkers to get a more accurate rate. Reducing the rate from 20% to 12% on a £40,000 car changes the annual depreciation figure from £8,000 to £4,800 — a £3,200 difference that significantly changes your total cost result.
EVs have lower running costs but higher purchase prices. The financial case depends heavily on how far you drive and how long you keep the vehicle.
An EV doing 8,000 miles/year at 3.5 miles/kWh, charging at 26p/kWh at home, costs about £594/year in electricity. A comparable petrol car at 45 mpg and 151p/litre costs about £1,220/year. That is a saving of roughly £625/year. At 12,000 miles/year the saving grows to about £940/year. Over 7 years: £4,000–£7,000 saved just on fuel — before factoring in servicing.
EVs have no oil changes, no timing belts, no transmission fluid, simpler cooling systems, and regenerative braking that dramatically reduces brake wear. EV servicing typically costs 40–60% less than equivalent petrol cars. Annual EV servicing is often £400–£800 vs £800–£1,500 for petrol. Over 7 years: approximately £3,000–£7,000 saved in servicing.
EVs are currently depreciating faster than most petrol cars in the United Kingdom, partly due to rapidly improving technology (newer models become more desirable quickly) and battery uncertainty. A £60,000 EV losing 18% per year in Year 1 loses £10,800 — vs a £35,000 petrol car losing 15% losing £5,250. Select EV mode and adjust the depreciation rate in Advanced mode to see how this affects your total. The EV case improves dramatically if you keep the vehicle for 7–10 years and if battery longevity proves as good as warranted.
Small changes in each cost category compound — here are the highest-impact actions for most UK drivers.
Look at the category chart — your biggest cost category is where to focus first. For most drivers, that is depreciation. The most powerful move is buying a used car from a brand with strong resale (Toyota, Mazda) rather than buying new. Switching from a new £40,000 car to a 3-year-old version of the same car at £26,000 saves approximately £2,500–£3,500/year in depreciation alone.
Car insurance premiums vary by 30–100% between providers for identical coverage. Set a reminder 3 weeks before your renewal to compare at least 3 quotes. Budget Direct is not on all comparison sites — always quote directly. Raising your excess from £600 to £1,000 saves £200–£400/year for most experienced drivers. Switch to the Car Insurance calculator to model your specific situation.
Main-dealer servicing for standard scheduled items typically costs 30–50% more than a good independent garage. Servicing at an independent does not void your manufacturer warranty for most work, thanks to Block Exemption rules. Ask your garage to use the same specification oil and parts listed in your service schedule and keep receipts. This alone can save £300–£700/year for most cars.
The eight cost categories and how each is estimated
The eight cost categories
| Category | Typical annual cost | Notes |
|---|---|---|
| Depreciation | £3,000–£12,000 | Largest single cost — often ignored by buyers |
| Fuel / electricity | £800–£2,500 | Highly variable — depends on miles, mpg, price |
| Insurance (comprehensive) | £1,000–£3,000 | Varies by age, postcode, claims history |
| VED (road tax) | £20–£600 | Varies by CO2 emissions and list price |
| Servicing & maintenance | £400–£1,500 | Higher for older vehicles and high mileage |
| Tyres | £150–£600 | ~1 set every 20,000–30,000 miles; £300–£600/set |
| Loan interest | £0–£5,000 | If financed — significant cost often hidden |
| Parking, tolls, other | £0–£5,000 | Can be substantial for city-centre commuters |
Depreciation methodology
This calculator uses the diminishing-value (DV) method: annual depreciation = car value × depreciation rate. At the default 15% rate, a £35,000 car loses £5,250 in Year 1, then £4,463 in Year 2 (applied to the reduced value). In practice, market depreciation follows a steeper curve — losing 20–30% in Year 1 — but the DV method at 15% gives a reasonable multi-year average.
Fuel calculation
Annual fuel cost = (annual miles ÷ mpg) × 4.546 × fuel price (£/litre), since one imperial gallon is 4.546 litres. For EVs: annual electricity cost = (annual miles ÷ miles-per-kWh) × electricity rate (£/kWh). The calculator switches the fuel fields to show electricity rates when EV is selected.
Comparing running costs by fuel type — which is cheapest over 5 years?
Fuel / energy cost comparison
| Fuel type | Typical economy | Energy cost | Annual fuel cost (8,000 miles) |
|---|---|---|---|
| Petrol | 35–50 mpg | 151p/litre avg 2026 | £1,100–£1,570/year |
| Diesel | 50–65 mpg | 167p/litre avg 2026 | £930–£1,215/year |
| Hybrid (petrol) | 55–70 mpg | 151p/litre avg 2026 | £785–£1,000/year |
| EV (home charging) | 3.0–4.2 miles/kWh | 26p/kWh home | £495–£695/year |
| EV (public rapid) | 3.0–4.2 miles/kWh | 54–79p/kWh public | £1,030–£2,105/year |
5-year total ownership cost comparison
Higher purchase prices for EVs mean higher depreciation — which can offset the fuel savings. However, EVs have significantly lower servicing costs (no oil, fewer brake replacements due to regenerative braking, no timing belt). At high annual mileage (12,000+ miles), the fuel savings for EVs become decisive. At low mileage (<6,000 miles), the higher depreciation cost of an expensive EV may outweigh fuel savings.
EV running cost considerations
- Home charging: Off-peak overnight EV tariffs (7–10p/kWh) give the lowest charging cost
- Public rapid charging: 54–79p/kWh is significantly more expensive — comparable to petrol per mile
- Vehicle tax (VED): since April 2025 EVs pay road tax — £10 in year one for new zero-emission cars, then the £200 standard rate
- Battery replacement: Most modern EV batteries warrant 8 years or 100,000 miles — factory replacement £10,000–£25,000
Practical strategies to reduce total vehicle ownership cost in the United Kingdom
Rank your costs, attack the biggest first
Use this calculator to see which category dominates your costs. For most car owners: depreciation first, then fuel, then insurance. Reducing depreciation has the highest leverage — your choice of vehicle and when you sell it matters more than fuel efficiency for most driving patterns.
Depreciation strategies
- Buy a 2–3 year old vehicle — the first owner absorbs Year 1–2 losses (often £10,000–£20,000)
- Choose high-resale brands: Toyota, Mazda, Subaru outperform European brands by 15–25% over 5 years
- Hold for longer: depreciation per year drops dramatically after Year 5
- Avoid high-mileage or modified vehicles — both reduce resale significantly
Fuel cost strategies
- Use apps like PetrolPrices or Confused.com Fuel Finder to find the cheapest local price
- Supermarket forecourts (Asda, Tesco, Sainsbury's, Morrisons) are typically cheapest
- Maintain correct tyre pressure: under-inflation increases fuel consumption by 2–3%
- Motorway vs town driving: limit stop-start town driving where possible — town fuel economy is 20–40% worse
Servicing cost strategies
- Servicing at independent garages (not main dealers) saves 20–40% — your manufacturer warranty is protected under Block Exemption rules
- Drive defensively to extend brake and tyre life
- Tyre rotation every 6,000 miles extends tyre life by 20–40%
- Compare tyre prices at Blackcircles or Tyre Shopper before visiting a fitter
Industry benchmarks for car running costs from the RAC and HMRC data
RAC vehicle running costs (approximate 2026)
The RAC publishes annual vehicle running-cost guides — among the most comprehensive in the United Kingdom. Key findings from their research:
| Vehicle class | Annual cost (8,000 miles) | Cost per mile |
|---|---|---|
| Supermini (e.g. MG3, Toyota Yaris) | £3,000–£4,000 | £0.38–£0.50 |
| Small family (e.g. Mazda 3, Toyota Corolla) | £3,500–£5,000 | £0.44–£0.63 |
| Medium (e.g. VW Passat, Ford Mondeo) | £4,500–£6,500 | £0.56–£0.81 |
| Large SUV (e.g. Range Rover) | £8,000–£12,000 | £1.00–£1.50 |
| Pickup (e.g. Ford Ranger) | £6,000–£9,000 | £0.75–£1.13 |
| EV (e.g. Tesla Model 3) | £5,000–£8,000 | £0.63–£1.00 |
HMRC approved mileage rate
HMRC sets an Approved Mileage Allowance Payment (AMAP) rate for using your own car for work — 55p per mile for the first 10,000 business miles in a tax year, then 25p per mile after that (2026/27). This rate is designed to cover all running costs including depreciation, fuel, insurance, and servicing for an average car. If your actual costs per mile are lower than 55p, the AMAP rate may over-compensate — and vice versa.
Frequently asked Frequently asked questions
What is the average annual cost to run a car in the United Kingdom?
The average cost to run a mid-size car in the United Kingdom for 8,000 miles/year is approximately £5,000–£8,000 per year, or £0.60–£1.00 per mile, depending on the vehicle. This includes depreciation (typically the largest single cost), fuel, insurance, VED (road tax), servicing, and tyres. RAC research consistently finds that depreciation accounts for 30–40% of total ownership cost — more than fuel and servicing combined for most drivers.
Is an EV cheaper to run than a petrol car in the United Kingdom?
For running costs (fuel + servicing), EVs are significantly cheaper — typically £1,500–£3,000/year less in fuel, and lower servicing costs due to fewer mechanical components. However, the higher purchase price means more depreciation, which can partially or fully offset running savings. At higher annual mileage (12,000+ miles) the running cost savings become decisive. At lower mileage or for drivers who keep cars for a shorter period, the depreciation difference may outweigh the running cost savings. From April 2025 EVs also pay VED (road tax), currently the £200 standard rate — still far less than petrol running costs.
Why is depreciation the largest car cost for most people?
A new £40,000 car typically loses £7,000–£10,000 of market value in the first year — more than most people spend on fuel and servicing combined. Even in Years 2–5, annual depreciation is £3,000–£6,000. Because depreciation is not a cash payment (it comes out when you sell the car), many car owners ignore it. But when you sell for £20,000 less than you paid, that difference is real money. Choosing a brand with strong resale (Toyota, Mazda) and buying a 2–3 year old vehicle are the most powerful strategies to reduce this cost.
What does it cost to run a car per mile in the United Kingdom?
For a typical mid-size car driven 8,000 miles/year in the United Kingdom, total cost per mile is approximately £0.60–£0.95. At lower mileage (5,000 miles/year), the fixed costs spread less and £/mile rises to £0.90–£1.40. At higher mileage (15,000 miles/year), it drops to approximately £0.45–£0.65/mile. HMRC sets a 55p/mile AMAP rate (first 10,000 business miles) for 2026/27 as a benchmark for work-use claims. The cost-per-mile curve chart in Standard mode shows how your specific costs change at different annual distances.
Where these figures come from
Cost-of-living and inflation figures on this page are drawn from the Office for National Statistics (CPI), The Bank of England (inflation target and monetary policy), and GOV.UK (statutory minimum wage).
- Consumer Prices Index (CPI) — ONS — Inflation and price indices.
- Bank of England inflation target (2%) — Bank of England — Inflation.
- UK earnings & household income — ONS — Earnings and working hours.
- National Minimum & Living Wage — GOV.UK — Minimum Wage rates.
- Household financial position — Bank of England — Financial Stability Report.
Last checked: April 2026. Rates and thresholds are reviewed against the source of record each November, when annual adjustments for the following tax year are published.