How to save money when running a car

Driving a car makes commuting to work, getting your weekly shop done, and going on holidays easier and more convenient. Once you get the hang of driving, there's no going back.
But the rising costs of owning and running a car can quickly add to your monthly expenses. However, you don't have to compromise on your convenience. In this guide, we'll walk you through the various costs of running a car, and share tips on how to manage and reduce these expenses.

Standing charges refer to fixed costs that come with running a car, which are unavoidable. For example, costs like tax and insurance - all drivers need to tax and insure their cars before they can drive on the UK roads.

Vehicle Excise Duty (VED), commonly known as road tax, is based on your car’s CO2 emissions and fuel type.
The annual cost can range from £0 for electric vehicles to £2,745 in the first year of taxing your vehicle for the highest emitting petrol and diesel cars, in the financial year 2024-25. To save on the Vehicle Excise Duty, consider: - If it works with your finances, paying for a full year upfront 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 - For vehicles emitting over 101g/km CO2 emissions, the first-year tax rate will be higher than the standard tax rate of £190. - Buying a used car could help save from paying the first year's tax. - If you prefer driving a new car, consider leasing a vehicle. With leasing, you get a number of costs covered in the cost of the lease deal including VED.

It is necessary to insure your car before you can start driving it in the UK. Car insurance cost depends on various factors, including the type of car, your driving record, age, and location.
There are three main types of car insurance policies: • Third-Party: Covers damage to other vehicles and property • Third-Party, Fire and Theft: Includes third-party coverage plus protection against your car being stolen or catching fire. • Comprehensive: Covers all of the above plus damage to your car To save money on car insurance: - 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. - Increasing your voluntary excess may help bring the overall cost down. Just check that you would be able to pay for the excess if you do need to make a claim. - Consider installing a telematics device (black box) to monitor and improve your driving to reduce premiums - 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.

charge for a car's MOT is £54.85, with no extra VAT added. It could cost a lot more, however, should your car fail its MOT.
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 contributes 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.

In addition to those necessary costs, you'll also have to pay out to keep the car running. These costs can vary, depending on how much you use the car.

Fuel is one of the most significant ongoing expenses of running a car. The amount you spend on fuel will depend on your car's fuel efficiency, your driving habits, and the current fuel prices.
The average cost of petrol and diesel in the UK varies, but according to the RAC, as of August 2024, the average price per litre is approximately £1.50 for petrol and £1.56 for diesel. To reduce your fuel costs: - Calculating your mileage to keep a track of your monthly spendings on fuel. This can help put in perspective which journeys are important, and which journeys can be avoided - If you’re considering buying or leasing a car, choose a vehicle with better fuel efficiency - Maintain your car well to improve its fuel economy - Consider driving an electric or hybrid car to reduce your spending on fuel - Consider carpooling or using public transportation when possible

Servicing isn’t a legal requirement, but it’s highly recommended. Servicing and regular maintenance is crucial to keep your car running efficiently and safely. Neglecting maintenance can lead to more significant problems and higher repair costs.
Where to save money on car maintenance: - Get your car regularly serviced, including oil changes, brake checks, and tyre rotations, to help prevent costly repairs in the long run - Follow the manufacturer’s recommended maintenance schedule, and visit a trustworthy local mechanic or service centre - Regular checks on tyre pressure, fluid levels, and brake pads can help prevent unexpected expenses - 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 - 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

Depending on where you live and drive, parking fees and tolls can be a significant part of your car's running costs. If your weekly commute involves toll roads and inner-city parking, costs can soon rack up.
In 2024 the average cost of daytime parking for a council car park sat at £1.29, according to Direct Line. Annual residential parking permits in some areas can add to your costs. 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, however, add time onto your journey - If it isn’t too inconvenient, and doesn’t add too much to the fuel bill, plan your routes to avoid toll roads if possible

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.

In the UK, driving offences such as speeding, using a mobile phone while driving, or driving without insurance can result in penalty points on your licence. These points stay on your record for 4 to 11 years, depending on the severity of the offence. Having penalty points can also increase your insurance premium.
To avoid the costs associated with penalty points, it’s important to drive responsibly and adhere to speed limits. If you’re offered a speed awareness course, it may be a worthwhile investment to avoid getting a fee and points on your licence. For more guides and advice, browse through our car ownership collection