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How much does it really cost to run a car?

A car is one of the most costly items that you will need to budget for. We look at the main overheads involved in running a vehicle and share our tips on keeping them down.

What you must have by law

There are a few things you must have by law before you begin to drive your car on the road:

Car insurance

Car insurance (also known as motor or road risk insurance) is a legal requirement even if the vehicle isn’t being used on the road. The only exception to this is if the vehicle has been officially declared as ‘off the road’ through the statutory off road notice (SORN) mechanism. There are three types of car insurance, each offering different levels of cover which attract varying premiums.

  • Third party is the most basic type of car insurance and the minimum legal requirement. As the name suggests, this will cover any third party (including your passengers), the other vehicle where applicable and property, but it won’t cover damage to your own vehicle.
  • Stepping up from third-party insurance is third party, fire and theft. This will cover your vehicle if it is stolen, damaged or destroyed by fire, but it still excludes your own costs if the accident was your fault.
  • Finally, there’s fully comprehensive motor insurance. As the name infers, this covers almost every eventuality for you, your vehicle, passengers and property, as well as those of the other parties. Fully comprehensive insurance also provides cover if your car is stolen, damaged or set ablaze, and will additionally insure you to drive other vehicles (minimum age and terms may apply).

Road tax

The amount of road tax you pay is based on either your engine size in the case of older cars, or the emissions if you have a newer car. Generally speaking, the lower the engine size or emissions, the lower the tax premium. Road tax can be paid for either every six or twelve months. Although the yearly option will cost more upfront, it does work out slightly cheaper than renewing every six months.

Use the GOV.UK car tax calculator to work out how much you might need to pay.


MOT stands for Ministry of Transport, and is a yearly test for all cars over three years old to make sure they remain safe and roadworthy. The standard cost set by the government is £54.85 for a car, which means that garages cannot charge more than this to carry out the test – although you may find that some offer MOTs for less, so it is worth looking around.

Discover our best tips for saving money on your motoring expense by clicking here.

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01844 293 810