Vehicle Running Cost & True Cost of Ownership
Calculate the complete annual running cost of your vehicle — not just fuel, but every cost that makes up the true cost of ownership.
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Vehicle Running Cost Guide
What do I need to know about The True Cost Breakdown?
Most people dramatically underestimate vehicle running costs because they only think about fuel. Complete annual costs: fuel: approximately 20-35% of total. Insurance: 15-25%. Depreciation: 25-40% (largest cost). Servicing and tyres: 10-15%. Road tax (VED): £0-600 depending on CO2 and age. MOT: £54.85 maximum. Parking and tolls: highly variable. Finance interest (if financed): often overlooked. For a 3-year-old Ford Focus petrol, 10,000 miles/year: fuel at 40mpg, 148p/L: approximately £1,680. Insurance, servicing, MOT, road tax, and depreciation together typically add up to considerably more than fuel costs alone over a year of ownership.
What should I know about Fuel Cost Calculation?
Petrol/diesel: cost = (miles / MPG) × (fuel price per litre / 4.546). 4.546 litres per UK gallon. EV: cost = miles × (pence per kWh / 100) / miles per kWh. At 24p/kWh and 3.5 miles/kWh: 10,000 miles = 2,857 kWh × 24p = £685/year. Vs petrol at 40mpg, 148p/L: £1,680/year. EV fuel saving: approximately £995/year. Home charging vs public: home charging (7kW overnight) typically 7-15p/kWh (Economy 7 / smart tariff). Public rapid charging: 50-80p/kWh. EV running costs depend heavily on charging habits — a driver who charges almost entirely at home overnight will pay dramatically less per mile than one who relies mainly on public rapid charging.
What's the key thing to understand about Depreciation by Age and Type?
Depreciation is the biggest cost for most car owners and is largely invisible. Year 1: new car loses 15-25% of value. Year 3: typically 50-60% of new price remaining. Year 5: 35-45% of new price remaining. After year 5: depreciation slows dramatically (stable value period). Best value scenarios: buy at 2-4 years old: someone else has paid the steepest depreciation, but major mechanical issues unlikely. Fleet and lease returns in this age bracket are often well-maintained with a full dealer service history, making them a reasonable choice for buyers wanting a lower-depreciation used car.
What's the difference between EV and Petrol True Cost Comparison?
EV advantages: much lower fuel costs (assuming home charging). Lower servicing (no oil changes, fewer brake jobs due to regenerative braking). No road tax (currently zero VED for EVs). Government grants for charger installation. EV disadvantages: higher purchase price (£3,000-10,000 premium over equivalent petrol). Rapid depreciation (2022-24 data shows EVs depreciating faster than petrol). Limited range anxiety for some users. Higher insurance premiums for many models. Public charging costs can erode much of an EV's running-cost advantage if home charging isn't available, so access to a driveway or dedicated charger matters significantly to the overall comparison.