In this article:
Price of the car
As more motorists now finance or lease their vehicles – as opposed to buying one outright – it's easier to add up the total cost on a monthly basis.
The repayments on a car finance agreement or personal contract purchase (PCP) are a big expense, whether it's £200, £300 or £500 a month. But then you don't have to worry about depreciation, as this is absorbed into the monthly figure.
If you're not financing a new car on a PCP deal and instead are using a loan or savings, then you should expect around 15% depreciation on the car in the first year of manufacturer, and around 10% each year thereafter.
Insurance
Another significant expense in running a car is your insurance premium. For young drivers this can sometimes exceed the price of the car itself.
A quote is based on a number of factors, including the driver, vehicle and location, and you need to consider the annual premium before buying a particular car.
The AA research reported that most customers spend £73 a month on car insurance.
Cost of fuel
Whether your vehicle runs on petrol, diesel or maybe even electric, it's important to calculate your average spend on fuel each month. You can probably work it out from your bank statement.
Bear in mind the cost of charging an EV is usually much smaller than if you're running a combustion-powered car.
Our survey found that motorists spent an average £107 on fuel each month in a conventional petrol or diesel vehicle.