The True Monthly Cost of Running a Used Car

Most of the cost of running a used car is not the finance payment. Fuel, insurance, road tax, servicing, MOT and tyres all add up, and the simplest way to see the real figure is to turn every annual cost into a monthly one and add them together before you choose a car.

What costs should I include in a monthly car budget?

Work through each of these and write down a monthly figure for your own situation:

• Finance or purchase cost. If you are using finance, this is the fixed monthly payment. If you are paying cash, think about what the money could otherwise be doing.

• Fuel or electricity. Usually the biggest variable. It depends on your mileage, the car's real-world economy and where you charge or fill up.

• Insurance. Even if you pay annually, divide the premium by 12.

• Road tax. Most cars pay a set annual rate depending on when they were first registered. Divide by 12.

• Servicing and MOT. One service and one MOT a year for most cars.

• Wear items. Tyres, brakes, wipers and a 12-volt battery every few years.

• Parking and charges. Work or station parking, and any clean air zone charges if you drive into a city that charges cars.

How do I estimate my fuel cost?

Take your yearly mileage, divide it by the car's real-world miles per gallon, and multiply by 4.546 to get litres. Multiply that by the current pump price and divide by 12. For an electric car, divide your mileage by miles per kWh and multiply by your electricity rate.

Our running cost calculator does this for you and lets you compare petrol, diesel, hybrid and electric side by side.

How much should I put aside for servicing and repairs?

Set aside a small amount every month in a separate pot so the annual service, MOT and the next set of tyres do not arrive as a shock. Older cars and cars with a timing belt due will need more. A car with a full service history is easier to budget for, because you can see what has already been done. Our guide to full versus part service history explains why that matters.

Is road tax included in the monthly cost?

It should be. Rates depend on the car's registration date, its CO2 emissions and, for newer cars, its list price when new. Electric cars now pay vehicle tax too. You can check the exact rate for any car on GOV.UK before you buy.

Do clean air zones add to the cost in South Yorkshire?

Sheffield's Clean Air Zone does not charge private cars. It applies to vehicles such as vans, taxis, buses and lorries that do not meet the emissions standard. Our Sheffield Clean Air Zone guide explains who pays. If you drive into London or other cities, check their rules separately.

How can I bring my monthly costs down?

• Pick a lower insurance group. Smaller, lower-powered cars usually cost less to insure, which matters most for new drivers.

• Match the fuel type to your driving. A hybrid or electric car can save on fuel if your mileage and charging suit it. A small petrol car may still be cheapest for low mileage.

• Use your current car as a deposit. Part exchanging reduces how much you need to borrow.

• Keep up with servicing. A well-maintained car is more efficient and less likely to produce a large unplanned bill.

Common questions

Is PCP or HP better for a monthly budget?

PCP usually has lower monthly payments, with an optional final payment if you want to keep the car. HP has higher monthly payments, but you own the car once the last one is made. Our guide to HP and PCP explains the difference.

Should I budget for a warranty?

If you want protection from large repair bills, a used car warranty can help. Check what it covers and what it excludes before you pay for one. Our guide to what a used car warranty usually covers goes through the detail.

What is the most commonly forgotten cost?

Tyres and the annual service. Both are predictable, so putting a little aside each month avoids a large bill all at once.

Talk to us about the total cost

If you would like help finding a car that fits your whole budget, browse our cars in stock or call our sales team in Barnsley, South Yorkshire on 01226 574410. If you are thinking about finance, you can find out more on our finance page. We are a credit broker, not a lender, and any finance is subject to status and affordability checks.

For servicing and MOTs, our service centre charges a labour rate of £80 per hour plus VAT, and our menu prices include VAT. Call Customer Care on 01226 574321.

This guide is general information, not financial advice. Updated October 2026.