Car Running Costs

Calculating Your Car Running Costs

There has been a lot in the news lately about the high price of petrol and how it impacts your car running costs. It is true that petrol price do contribute to the typical costs of running and owning a car, but there are other costs too, some of which are pretty well hidden! has taken a look at all the expenses associated with a car and worked out how much it costs to run one car, a relatively old Renualt Clio.

About the Car Running Costs

This example uses a Renault Clio 1.2 litre engine, made in 2001, and bought nearly new in the UK. Obviously the running costs will vary from car to car and depending on your situation (how many miles you drive, what your insurance is, whether you have a reliable car or not etc), but these calculations should provide a basis for doing the calculations yourself. If you have your own example then please submit them to Whatgas and we will publish them!

Working our running costs

The simplest way to calculate the cost of running your car is to add up all of your bills over the year, take into account depreciation of the car, and that s your cost. However this doesn t really give a good comparison to other forms of transport such as bus, rail or cycling, and certainly doesn t help when claiming mileage for business. Therefore a much better way to calculate car running costs is to work out the cost per mile..

To work out the cost per mile of owning a car simply take the annual car cost and divide by your yearly mileage rate. Typically this would be around 12,000 miles a year, but this obviously varies a great deal on how you use the car, if you drive extensively for work everyday it could easily be 2-3 times this amount, thus drastically affecting that all important cost per mile.

Petrol Prices fuel your running costs

Petrol is one of the largest contributors to your car running costs, especially if you don t have a particularly fuel efficient car. To work out how much petrol costs you per mile you need to first calculate the average number of miles per gallon you achieve. You can either do this by taking a look at our Car Mileage database or by doing a little bit of experimentation - Next time you fill up the car with petrol, fill it the absolute maximum fill level and then zero your mileage counter. When you come to refill your car again, take the mileage reading and record how many litres of petrol you use. The amount of petrol you use will obviously vary depending on how and where you have driven your car, so it is probably worth repeating this cost calculating exercise a few times to get a good average petrol cost figure.

Cost per mile (p/mile)= Litres put in a tank x 105p / number of miles out of tank
Annual Running Cost (£) = Cost per mile x Average mileage /100

The Renault Clio takes about 40 litres to fill up and travels 400 miles on a full tank, giving it a respectable MPG of 45. This equates to around 10.5p/mile assuming that the Price of Petrol is around 105p per litlre

For a Renault Clio
Cost per mile = 40 x 105 / 400 = 10.5p per mile
Annual Running Cost = 10.5p x 12,000 / 100 = £1260

Note that if you had one of the poorest performing cars in terms of MPG then your cost per mile could be much higher. A typical Bentley achieves 14 miles to the gallon an on this the cost of petrol would shoot up to 34p per mile. On the other hand a more efficient car could pull this cost right down, a Smart car can achieve 60mpg, giving a cost per mile of only 7.9p!

Search for petrol prices in your area

Car Insurance Costs

Car insurance is a one of cost that you will have to shell out for each year. The cost of car insurance does vary a great deal depending on the type of car, the drivers age, occupation and sex, as well as how exactly the car is to be used (for work, high mileage, parked off road etc). Therefore giving a typical car insurance cost is very unreliable. However in this instance for the Renault Clio and its driver the annual car insurance is around £350 a year.

Annual Running Cost = Your annual insurance bill
Cost per mile = insurance bill / annual car mileage / 100

For a Renault Clio
Annual Running Cost = £350 (2 years no claims)
Cost per mile = £350 / 12,000 x 100 = 2.9p

Running Cost so far = 13.4p/mile or £1608 a year

Car Service and MOT Costs

Keeping your car in good shape can cost a great deal, and even if your car is relatively new and reliable you will have to pay for an MOT (if it is older than 3 years) and you should get an annual service. On top of that you may well have to pay for some major or minor repairs that aren't included in the standard 1 year service.

Over the past 3 years the Renault Clio has incurred the following costs:

  • Car MOT x 3 = £135
  • 2 Minor Services = £140
  • 1 Major Service = £300
  • New drum brakes = £200
  • New front brake pads = £120
  • Repair work to suspension = £400

This averages out at around £430 per year. Of course this will again vary a great deal depending on your car and how it is used

Annual Running Cost = Your annual service bill
Cost per mile = service bill / annual car mileage / 100

For a Renault Clio
Annual Running Cost = £430
Cost per mile = £430 / 12,000 x 100 = 3.6p

Running Cost so far = 17p/mile or £2040 a year

Car Tax

Unfortunately we all have to pay this, and its about 100 pounds a year for a reasonably non polluting car, this increases slightly for the large, gas guzzling cars. The rules on Car Tax have changed recently and its all got quite complicated. Take a look at our Car Tax band calculator to help work out how much you should be paying to put the Tax Disc on your car.

Annual Running Cost = Car tax bill
Cost per mile = tax bill / annual car mileage / 100

For a Renault Clio
Annual Running Cost = £120
Cost per mile = £120 / 12,000 x 100 = 1p

Running Cost so far = 18p/mile or £2160 a year

Car Wear and Tear Costs

This is a catch all category that collects all the car costs that aren't included elsewhere. This should contain small items such as oil refills, bought washer bottles, replaced light bulbs and replacement of worn tyres. Basically anything spent on the car that you have fitted or replaced yourself. These may seem like small amounts but the costs can quickly add up! The list below shows everything that was purchased in the last 12 months for the Renault Clio.

Annual Running Cost = Total of all items bought for car
Cost per mile = Total cost / annual car mileage x 100

For a Renault Clio

  • 1 can of car engine oil = £10
  • 2 bottles washer fluid = £8
  • 1 replacement headlight bulb = £6
  • 2 new car tyres = £120
  • 1 new washer blade = £10
  • 1 new car hubcap = £12
  • 1 bottle car polish = £8
  • 1 bottle car shampoo = £5

Total Cost = £179
Cost per mile = £179 / 12,000 x 100 = 1.5p

Running Cost so far = 19.5p/mile or £2340 a year

Depreciating Car Value

This running cost of cars is usually forgotten, which is unfortunate as it can often be the biggest expense! Your brand new car is depreciating in value every mile that you drive it, especially those first few feet that you drive it off the car showroom floor. Although this cost won t affect your bank balance on a monthly basis you will feel it when you come to sell your old car and buy a new one. Generally the longer you hold on to a car the less you will be affected by car depreciation.

Annual Depreciation Cost = (Value when bought - Current value) / Years
Cost per mile = Depreciation / annual car mileage x 100

For a Renault Clio
Annual Running Cost = (£6000 - £1500) / 7 = £640
Cost per mile = £833 / 12,000 x 100 = 5.3p

Running Cost so far = 20.9p/mile or £2976 a year

Running Running Cost Summary

In this example Whatgas have shown that it costs nearly £3000 a year to own and run Renault Clio. Sounds like quite a lot, but all the figures are there! The car in question is a small fuel efficient car with a good track record of reliability, and so you could expect other types of cars to cost an awful lot more than this. It would not be surprising to see running costs two or even three times this amount if certain cars were looked at.

Why not do the calculation yourself on your vehicle and see what you come up with. Let us know and we will gladly publish it for you.