After you’ve passed your driving test, you’ll be looking forward to finally owning a car. But it’s important to budget beforehand to ensure that you won’t stretch your budget too far. Below, we explore the real costs associated with owning a car.
Fuel
Fuel is a regular expense that you’ll have to factor into the cost of owning a car. If you’re using the car regularly, you’ll usually have to fill up the car once a week. Although prices fluctuate depending on location, you can get an estimate of this cost by using an online calculator.
Finance charges
Buying a car in one hit can be too expensive for most people. A common way to purchase a car, instead, is by finance. This is where you make smaller, monthly payments towards the cost of the car. The amount you pay will depend on the duration of the loan and whether you made any down payment.
Depreciation
Depreciation can hit a car’s value hard. In the first year, the value usually drops between 15 and 35 per cent and up to around 50 per cent over the next three years. This can make selling your car difficult in the future. As such, you should include this cost in your initial calculations when buying a car.
Insurance
Insurance is another costly expense. These are usually monthly payments that cover you in case you get into an accident or damage the car. The cost of your insurance is based on your age, occupation, habits and the type of car.
The actual car
Of course, the actual car you buy has a huge impact on the cost of your ownership overall. If you buy a sports car, you’re going to be spending a lot, but a second-hand car can be a lot cheaper. This is why it’s important to buy a reliable brand such as a Vauxhall Corsa – you’ll know exactly what you’re getting, and it’ll be simpler to budget for.
Maintenance and tyres
Your car will also need maintenance and repairs – sometimes these problems can occur at unexpected moments. Once you’ve owned a new car for three years, it’ll need an annual MOT which will become a regular expense.
Licensing, registration and taxes
You’ll also need to pay taxes for your car in the UK. The price you pay will depend on how environmentally friendly your vehicle is and can often cost over £1000 per year.
Owning a car comes with many costs that you might not initially expect. But by anticipating these costs and carefully budgeting, you should be able to avoid any unwelcome surprises.
