The list price on a new car is only the entry fee. UK car running costs — fuel, VED, MOT, insurance and depreciation — stack up every year you own it and often dwarf the purchase price over five or ten years.
This 2026 guide breaks down what each cost actually looks like in the UK today, using verified figures, so you can budget honestly before you buy.
UK car running costs: the five buckets
Every penny you spend on a car falls into one of five categories: depreciation (the value it loses), fuel or electricity, tax and legal (VED and MOT), maintenance (servicing, tyres, brakes), and finance if you borrow. Depreciation is usually the largest by far.
Verified UK figures for 2026: petrol at £1.64 per litre, diesel at £1.86, household electricity at £0.263 per kWh, VED at around £190 a year for the 111–130 g/km CO₂ band, and the MOT test capped at £54.85.
VED is free for the first year on new zero-emission cars, then moves to the standard rate in year two.
VED and MOT: tax, the test, and legal costs
Vehicle Excise Duty (VED) is a CO₂-band system. Cars emitting 111–130 g/km pay about £190 a year; lower emissions mean lower bills and higher emissions mean higher bills. The first-year rate on new petrol and diesel cars is higher than the standard rate, so your second year onward is often cheaper.
The MOT test costs a maximum of £54.85 and is legally required every year once your car turns three. It covers lights, brakes, tyres, structure, seatbelts, doors, mirrors and emissions. A failure means fixing the issues then paying again — or paying again at a different garage.
UK fuel prices: what a litre actually costs at the pump
Petrol in the UK costs £1.64 per litre and diesel £1.86 as of September 2026. A full 50-litre tank therefore costs roughly £82 for petrol or £93 for diesel — before you have driven a single mile.
Electricity at £0.263 per kWh is far cheaper per mile. A typical EV does about 3 miles per kWh, so a 200-mile week costs roughly £18 in electricity versus £40–£50 in petrol for a 40 mpg car. But remember: VED still applies to most electric cars (at a lower rate) and depreciation on EVs is steep.
Depreciation: the hidden cost of owning a car UK
A typical new car loses 15–25% of its value in the first year and about half its price over five years. That is the single biggest line in the UK car running cost ledger — more than fuel, VED or MOT combined for most drivers.
Fast-depreciating cars include premium brands and vehicles with poor used demand. Cars that hold value best tend to be hybrids, popular small cars and models with strong brand loyalty in the used market.
| Cost | Typical annual figure | Notes |
|---|---|---|
| Petrol fuel (10,000 miles) | £1,400–£1,800 | At £1.64/L, 40 mpg average |
| VED | £190 | 111–130 g/km band |
| MOT | £54.85 cap | Required every year from age 3 |
| Electricity (EV) | £600–£800 | At £0.263/kWh, ~3 mi/kWh |
| Depreciation | £2,000–£4,000 | Depends on car value and age |
| Insurance | varies | Not included — see your quote |
Cost of owning a car UK: maintenance and finance
Servicing, tyres, brakes and unexpected repairs are the upkeep that catches people out. Costs vary by model, age and mileage — a small city car is cheaper to serve than a luxury SUV, and older cars need more attention.
If you finance the car — through a personal loan, PCP or lease — interest is an extra annual cost layered on top of everything else. The total cost of owning a car UK is always higher than the sum of the visible bills because of these two wildcards.
UK car running costs: what you can change
Three things drive down every bucket at once: drive fewer miles, choose a high-resale-value car, and do routine maintenance before things break. Switching from petrol to electric or hybrid cuts your fuel bill at £0.263/kWh versus £1.64/L petrol, but the VED and depreciation dynamics differ.
If you are buying used, a car that is two or three years old avoids the worst of that 15–25% first-year depreciation cliff. Use the calculators below to plug in your own mileage, fuel type and VED band to get a realistic annual figure.
Always factor in that MOT will soon be mandatory and VED will renew annually — budget for both from day one.
Use the free calculators
Frequently asked questions
What is the average monthly cost of running a car in the UK?
For a typical mid-size petrol car driven 10,000 miles a year, expect roughly £200–£300 per month once fuel, VED at around £190, MOT at £54.85, depreciation, insurance and maintenance are all counted. Smaller or older cars can be closer to £150; premium or financed cars push well above £300.
How much is VED per year in the UK?
VED is a CO₂-band system. Cars emitting 111–130 g/km pay about £190 a year; lower bands cost less and higher bands more. The first year on a new petrol or diesel car uses a higher rate, then it drops to the standard rate. Zero-emission cars are exempt from the standard annual charge.
How much does an MOT cost in the UK?
The legal maximum is £54.85 for a car MOT. That covers the full safety and emissions inspection. If your car fails you must fix the issues then pay for a re-test — which is free if you return to the same garage with repairs done within ten working days.
Are UK fuel prices higher than the EU average?
UK petrol at £1.64 per litre converts to roughly €1.90, putting it above the EU average of €1.840 per litre but below Germany at €2.236. Diesel at £1.86 is similarly above the EU average of €1.966. Local taxes and currency swings mean prices shift, but the gap has narrowed since 2026 began.
Do electric cars save money on UK running costs?
Electricity at £0.263 per kWh is cheaper per mile than £1.64/L petrol, so your fuel bill drops significantly. However, VED still applies to most EVs (at a lower rate), and depreciation on electric cars is steep. The UK car running costs for an EV depend heavily on how long you keep it.