The running costs can include:
- Fuel. This is generally one of the main costs, particularly if you do a lot of mileage.
- Servicing and repairs.
- It is a legal requirement to have insurance when driving a car.
- The absolute minimum is third party cover which covers damage only to the other vehicle or its occupants if you are liable in an accident.
- Fully comprehensive cover: This covers you against accidental damage to your car, and usually other things such as personal accident and injury to you and passengers, windscreen damage, personal effects stolen from the car, etc.
- Compulsory excess — If you make a claim, you will have to pay a first stated amount (e.g. £100) towards the damage or loss.
You will receive a notice to pay each year, and you can pay at a post office by producing the notice to pay, a current insurance certificate, and a current MOT certificate (if the car is more than three years old).
This refers to the gradual decrease in value of the car over time. A new car immediately depreciates by about 20% as soon as it is driven out of the showroom, 40% after the first year, and 60% over the next 3 years.
- Prices of spare parts
- Security and safety of the car.
- Parking permit.
- Loan interest (if buying on credit). See the section below on interest and financing options.
- Breakdown cover. This is a type of insurance which covers you for mechanical breakdowns on the road or at your home.
New or Second-Hand?
- No need for a mechanical inspection, since they should come with a warranty.
- Have the latest technology, safety features, good fuel consumption and environmental performance.
- They do not need an MOT certificate for the first three years.
- They depreciate immediately when you drive them out of the showroom.
- The price often has hidden extras.
Second hand cars
- Second hand cards are much cheaper.
- They often have much lower depreciation profiles than new cars.
- They need a MOT if more than three years old.
- Maintenance costs are likely to be higher.
- The car needs mechanical inspection — which may be charged.
Drivers and Vehicle Licensing Agency. This is the official government site all about licensing a vehicle, drivers licences, and personalised number plates.
In debt and need help?
Call a CCCS counsellor at 0800 138 1111