DRIVE DAILY

Owning a car in the UK isn’t expensive because you’re bad with money.

It’s expensive because most of the costs are hidden, normalised, or spread out just enough that you don’t feel the hit all at once.

Monthly payments get all the attention.

Everything else? Death by a thousand direct debits.

Let’s break it down properly.

The Headline Number (Brace Yourself)

According to RAC and AA data, the average cost of running a car in the UK now sits between £3,000–£4,000 per year excluding finance — and that’s for fairly modest cars.

Once finance is involved, many drivers are quietly spending £7,000–£10,000 a year on a “normal” car.

And yes, that includes people who swear their car is “cheap to run”.

1. Car Finance: The Obvious Cost (But Still Misunderstood)

Let’s start with the bit everyone fixates on.

Typical 2025 finance costs:

• Average monthly PCP payment (UK): £350–£450

• Average term: 36–48 months

• Typical APR: 8–12% (often higher for younger drivers)

That’s £4,200–£5,400 per year before you’ve insured it, fuelled it, or driven it anywhere interesting.

The Financial Conduct Authority (FCA) has repeatedly flagged that many UK buyers focus on monthly payments rather than total cost — which is exactly how people end up overpaying thousands without realising it.

Monthly affordability ≠ financial efficiency.

This is where independent finance brokers and transparent dealers (the kind Drive Daily works with) genuinely matter — because comparison saves real money, not vibes.

2. Insurance: The Silent Budget Killer

Insurance has gone nuclear.

According to ABI (Association of British Insurers):

• Average UK car insurance premium in 2024/25: £627

• Young drivers (17–25): often £1,200–£2,500+

Why?

• Repair costs are up

• Parts shortages

• More tech = more expensive crashes

• Courtesy car claims are wild right now

Even experienced drivers are seeing 20–40% increases year-on-year.

And no — loyalty does not pay. Ever.

This is why using multi-insurer brokers (instead of single-brand comparison sites) is becoming more common — they actually understand underwriting risk, not just price sorting.

3. Fuel: Still Expensive, Just Less Loud About It

Fuel stopped making headlines — not because it got cheap, but because we got used to it.

Average UK fuel spend (2025):

• Petrol: ~£1.45–£1.55 per litre

• Diesel: ~£1.55–£1.65 per litre

If you drive:

• 8,000 miles/year → ~£1,200–£1,400

• 12,000 miles/year → ~£1,800–£2,100

That’s assuming sensible driving and no “spirited” motorway habits.

EV drivers aren’t immune either — public charging can cost 60–85p per kWh, which often works out no cheaper than fuel if you can’t charge at home.

4. Servicing & Maintenance: The Cost Everyone Underestimates

This is where ownership quietly bleeds you.

Typical annual servicing costs:

• Minor service: £180–£250

• Major service: £300–£500

• Tyres (set of four): £400–£1,200

• Brakes (pads & discs): £250–£600

Modern cars aren’t “low maintenance” — they’re high maintenance, just less frequent.

And when something does go wrong, it’s rarely cheap:

• Sensors

• Cameras

• Electronic handbrakes

• DSG gearboxes

• Hybrid systems

This is why warranties, service plans, and trusted independents are becoming less of a luxury and more of a survival strategy.

5. Road Tax (VED): Death by Category

VED isn’t huge monthly — but it stacks.

2025 examples:

• Small petrol car: £180/year

• Mid-range petrol/diesel: £180–£220

• Older high-emission cars: £300–£600+

• EVs: now taxable from April 2025

And if your car cost over £40,000 new, enjoy the luxury car tax:

• +£390 per year for five years

Yes, even if you bought it used.

6. Depreciation: The Cost Nobody Mentions (But Everyone Pays)

This is the biggest cost — and it’s invisible.

According to CAP HPI and AutoTrader data:

• Average new car loses 40–60% of its value in 3 years

• Premium brands can lose £15k–£25k shockingly fast

You don’t “pay” depreciation monthly — but it’s baked into:

• Your finance

• Your balloon payment

• Your next deposit

This is why some cars feel “cheap monthly” but destroy you long-term.

The Real Annual Cost (2025 Example)

Let’s say:

• £400/month finance → £4,800

• Insurance → £900

• Fuel → £1,800

• Servicing & maintenance → £700

• Tax → £220

Total: ~£8,420 per year

And that’s for a fairly normal car.

No mods. No fines. No breakdowns. No surprise tyres.

Why This Matters (And Why Most People Never Do This Maths)

Car ownership becomes expensive when decisions are made emotionally instead of structurally.

People don’t overspend because they’re reckless.

They overspend because no one ever lays it out like this.

That’s the gap Drive Daily exists to fill.

How to Lower the Cost (Without Giving Up Cars Altogether)

• Compare total cost, not monthly payments

• Use independent finance & insurance partners

• Avoid over-spec’ing cars that nuke depreciation

• Plan maintenance before it becomes a crisis

• Choose cars that hold value, not just clout

Small decisions compound fast.

Final Thoughts

Cars aren’t just a purchase — they’re a long-term financial commitment dressed up as a lifestyle upgrade.

Once you understand the real cost, you stop feeling “bad with money” and start making smarter choices that allow you to actually enjoy owning a car rather than stressing over it.