Cost of living: where you could save money when running a car

UK drivers spend thousands a year running their cars.
Fuel is often the biggest expense involved in running a car – so we’ve written this guide to driving more fuel-efficiently, and this guide to fuel prices – including potential money-saving tips. Aside from fuel, there are a number of outgoings to factor in – everything from tax and insurance to de-icer and parking fees. Here, we bring those costs together and talk you through areas you could potentially save money.

This article contains guidance and tips that could help – it does not constitute legal or financial advice. Visit Money Helper or Citizen’s Advice for free, impartial advice if needed.

First up, let’s look at the standing charges associated with running a car. These are fixed costs you have to pay whether you use the car or not – think tax and insurance.

The amount of VED you pay varies.
For cars registered between March 2001 and April 2017, the VED is based on the amount of CO2 produced by the engine. The CO2 production used is always the official figure shown on the V5C registration document. For cars registered after April 2017, the first year rate for a brand-new car is based on CO2; then the standard annual rate is the same for all vehicles. This currently excludes zero-emission vehicles like electric cars, but the government recently announced they’d start paying tax from 2025 so that window for saving on tax is closing.

If it works with your finances, paying for a full year up front works out as the cheapest way to pay overall.
But if paying monthly or every six months works better for you, then paying by Direct Debit can cost less. If you’re about to choose a new car, read up on car tax bands to find which cars pay the least tax and where you might be able to save.

The most a garage can legally charge for a car's MOT is £54.85, with no extra VAT added. Should your car fail it’s MOT, however, it could cost a lot more.
The uncertainty in eventual cost means drivers may consider skipping their MOT, but MOTs are a legal requirement. They ensure your car is road-worthy and contribute to the safety of all road users. Do not skip your annual MOT, or compromise your safety or the safety of others. For free, impartial advice on finances, visit Citizen’s Advice or Money Helper.

Servicing isn’t a legal requirement, but it’s highly recommended. Servicing can make your car more efficient – which can in turn help reduce running costs. It can also catch issues before they become bigger and more expensive problems to fix.
While servicing is an outlay, it can save money in the long run so it’s worth factoring your options in when budgeting.

There are three levels of insurance, with the most basic (third party) being a legal requirement for all cars on the road:
• Third party provides basic cover (damage to property or injury to others where you're found to be at fault) • Third party fire and theft insurance also includes cover for loss and damage due to fire or theft • Fully comprehensive insurance covers damage to your vehicle and often includes additional benefits Don’t assume third party is the cheapest just because it offers the least coverage. It’s worth getting quotes for different levels of coverage to find the one that suits you best.

Don’t accept your auto-renewal quote without shopping around. At the very least, you can use these quotes to haggle with your current provider and get a better deal.
Our top tips for saving on your car insurance are available here. If you’re looking at a new car, it’s worth knowing that choosing a car in a lower insurance group should mean lower premiums – but be sure to factor that in alongside the other important factors involved in buying a car. Learn more about how car insurance groups work. Here are our top picks of the cheapest cars to insure.

There are some costs associated with the upkeep of your vehicle, that you may or may not have to pay depending on your circumstances.

This will depend on personal circumstances over the span of any given week. If your weekly commute involves toll roads and inner city parking, costs could soon rack up.
But regardless of the situation, there are a few ways you could cut costs: • Ride-share and split the parking fare between you (this can help keep fuel costs down too) • Use park and ride schemes for cheaper parking further out of town – it can add time onto your journey so work out whether • If it isn’t too inconvenient, and doesn’t add too much to the fuel bill, you could reroute to avoid tolls

While £5 a pop for a car wash doesn’t seem much, it could add up over the year and prove to be a cost to cut back on.
Stay on top of your car’s condition though. Keeping a clean car can avoid problems with rust and mildew, as well as longer-term problems. This one’s particularly important over the winter months, as salt and grit could cause rust and other damage.

Keep your car clean and well-maintained to catch any issues before they become too costly to fix. Regularly perform the basic checks: coolant, oil and screen wash. Check tyre tread depth (legally is should be at least 1.6mm, but 3mm is recommended) and ensure there’s no damage.
If you need to replace your tyres, shop around for better deals. Remember to factor in the cost of the valve and balance, as well as disposing of the old tyre. Other checks to stay on top of include things like your windscreen wiper blades, bulbs, filters and brake pads. Through general wear and tear you might need to replace or fix more costly elements like suspension parts, ball joints or bushings in the steering system or the exhaust. If it helps, try budgeting how much it would cost to replace these individual parts and save a little each month towards your car as a “rainy day” fund. Always act when a warning light comes on in your car – don’t try and ignore it, as the problem could just get worse and more expensive to fix.

For more guides and advice, visit our cars on a budget page.