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.

Our Running Costs tool helps you estimate key expenses like insurance, tax, and fuel before you buy the car. Available on adverts on Auto Trader, the Running Costs feature can include:
Insurance costs. These vary depending on the car’s insurance group, which ranges from 1 to 50 based on factors such as size, value, and repair costs. The higher the group, the more expensive the insurance. You can also compare quotes directly to get the best deal. Car tax. This is calculated based on the vehicle’s first registration date, fuel type, and CO₂ emissions. Diesel cars generally incur higher tax costs than petrol models, while hybrids and electric vehicles benefit from lower rates due to their reduced emissions. If the list price of a car exceeds £40,000, an additional £410 is payable from the second year for up to five years. Fuel efficiency. This is another crucial factor, with miles per gallon (MPG) figures provided for urban driving (towns and cities), extra-urban (A-roads and mixed driving), and overall combined MPG. These figures offer a useful benchmark but remember it’ll vary based on driving habits and conditions. The data displayed reflects the usual specifications of the latest model and may differ for older versions. Always check with the seller for precise details before purchasing.

Some fixed costs, like tax and insurance, are unavoidable. But there are ways to keep those costs down.

Vehicle Excise Duty (VED), commonly known as road tax, is based on your car’s CO2 emissions and fuel type.
Ways to save on road tax include: • Pay for a full year upfront to get the cheapest overall rate, if you can afford it. But if paying monthly or every six months works better for you, then paying by Direct Debit can cost less. • If you’re buying a new car, check the tax bands – some cars are much cheaper to tax. • Buying used cars can help you avoid the steep first-year tax. • Leasing often includes road tax, so check if it’s covered in your lease deal.

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: • Get quotes for all coverage types, as comprehensive can be cheaper than third-party. It’s worth getting quotes for different levels of coverage to find the one that suits you best. • Increase your voluntary excess, but make sure you can afford it if you claim. • Install a black box (telematics) to lower premiums if you drive safely. • Choose a car in a lower insurance group for lower premiums. • If you own an electric vehicles, check specialist insurers as some offer lower rates. Here are our top picks of the cheapest cars to insure.

The standard MOT test costs £54.85, but failures can lead to costly repairs. Keeping your car well-maintained reduces the risk of unexpected expenses.
MOT money-saving tips: • Book early to find a cheaper test centre. • Check simple things before your test: lights, tyres, wipers, and fluid levels. • Consider a service and MOT bundle for discounts.

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.
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 • If you have an electric vehicle and can charge at home overnight, you'll get cheaper electricity if you have an off-peak tariff. • 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