How Much Does It Cost To Run A Car?

Regardless of whether you lease or buy a car, you will still have to pay a certain amount for it. How much you pay will all depend on what sort of car you drive, or more importantly, what sort of car you are willing to drive.

For example, if you borrow £15,000 at 10% interest over four years to pay for a new car, you will pay about £381 a month.

However if you borrow £25,000 to get a more “prestigious” car, you are looking at around £684 a month in repayments.

As you can see from this example, buying a more expensive car will cost you £253 a month extra.

Now let’s suppose you were able to put this into an investment that gets you on average 8% annual interest for 35 years. At the end of that period, you would have earned £580,000 just for driving a less expensive car!

In addition to this, young people who are new to driving will most likely go through several cars before they settle down with one they like.

So there is little point in wasting money when a cheaper car could adequately fulfil your needs.

Used Cars

If getting a cheaper new car can save you money, imagine how much you could save buying a used car.

It’s often said that the moment you drive off the forecourt your car starts to depreciate in value, and it’s true.

So unless you are absolutely loaded with cash, most young people would be much better off buying a decent second hand car.

This would also save them the headache of having to worry about getting rock bottom price for an expensive car they bought just a few years ago.

And because used cars are a lot cheaper, you won’t have to borrow so much money to pay for it, which means that overall you will spend less on interest repaying it.

The Cost Of Running A Car

In addition to the price of the car, you also have to take into consideration how much that car is going to cost to keep it running. Here are some of the things you should know about.

Maintenance

A car is a machine, and eventually it will breakdown down through wear and tear.

Depending on what needs repairing, you could be looking at some very large bills from your mechanic.

To help keep your car in good working order, do your best to maintain it yourself such as by changing the oil and ensuring your tires are properly inflated.

By doing these small things, you can help to prevent bigger problems later on which will be more costly to fix.

Insurance

Car insurance is very expensive, especially if you are young and a new driver or are trying to insure an expensive car.

Apart from shopping around for the best deal and having a clean driving history, there is nothing you can do to avoid this cost as you are legally required to have insurance.

Other Costs

There are various other smaller costs to think about when owning a car, such as petrol, parking fees, tolls and cleaning products.

Because these costs are small you probably won’t think about them much at the time, but if you add them all up (maintenance, insurance, petrol, and finance charges) you could be looking at up to £6000 a year just to keep your car running!

That’s a lot of money for someone who is on a budget and trying to save for their future, so it’s no wonder so many people are looking for other forms of transportation.

Carpooling

One way people try to reduce car costs is by sharing a car, also known as carpooling. For example, instead of driving to work by yourself, if you can get a lift with a friend you will be able to save money on tolls, gas and parking.

Also because you are using your car less, you will pay less on maintenance because the car is not being worn out so quickly.

Depending on where you live and how far you drive when carpooling, you could save yourself up to £1,500 a year. This money could then be put aside as a down payment for another car, saved or invested.

Overall when it comes to owning or driving a car take the time to really think about how you can save yourself money, because the little things you do could end up saving you a fortune.