The price on the windscreen is the smallest number in car ownership. What a car actually costs is the sum of everything that happens after you buy it: tax, insurance, fuel or electricity, the MOT, servicing, tyres, parking and the daily charges some cities now levy just for driving in, and above all depreciation, the money that quietly leaves the car every month whether you drive it or not. This section puts numbers on each of those lines so you can see the whole bill, and it explains the rules behind the ones that are set by government rather than by the market.
- Vehicle Excise Duty (road tax) is set by first-registration date, CO2 band and list price. Most cars registered since April 2017 pay a flat standard rate each year, plus an expensive car supplement for five years if the list price was over £40,000. Electric cars have paid VED since 1 April 2025.
- Depreciation is the largest single cost for any car under about five years old. A typical new car loses between 15 and 35 per cent of its value in the first year and around half by the end of year three.
- London's Congestion Charge rose to £18 a day from 2 January 2026 and the full electric-vehicle exemption ended at the same time. The ULEZ, at £12.50 a day, covers every London borough. Seven English cities run Clean Air Zones and four Scottish cities run Low Emission Zones.
- The maximum MOT fee for a car is £54.85 and for a motorcycle £29.65, set by the DVSA. Garages may charge less and many do.
The fixed costs: tax, MOT and insurance
Three costs arrive whether the car moves or not. Vehicle Excise Duty depends on when the car was first registered: pre-2001 cars are taxed by engine size, cars registered between 2001 and March 2017 pay by CO2 band, which is why some older diesels cost £20 or nothing at all, and cars registered from April 2017 pay a first-year rate based on CO2 followed by a standard rate, with the supplement for cars that listed above £40,000. A car that is not being used can be declared off the road with a SORN and pays nothing, but it may not then be parked on a public road. The MOT is a fixed annual cost from the car's third birthday and its fee is capped by law. Insurance is the one fixed cost you can move substantially, which is why it has a section of its own.
The variable costs: fuel, electricity and the charges for driving in
Fuel duty plus the 20 per cent VAT charged on the whole pump price together make up roughly half of what you pay for a litre of petrol or diesel, which is why pump prices move less than oil prices. For an electric car the equivalent decision is where you charge: an overnight off-peak home tariff can cost a quarter of the price per kilowatt-hour of a public rapid charger on a motorway, so the running cost of the same car can differ by a factor of four depending on the driver's access to a home socket. Then there are the road charges that now apply in a growing number of British cities. Our guide to congestion charges, ULEZ, Clean Air Zones and how they treat electric cars lists every zone, its daily charge and its rules, including the January 2026 changes in London that ended the free ride for EVs.
The invisible cost: depreciation
Depreciation is the difference between what you paid and what the car is worth when you sell it or hand it back, and for most owners of cars under five years old it is larger than fuel, tax and insurance put together. It is also the cost that leasing and PCP finance are built on: a lease payment is simply the car's forecast depreciation over the term, spread monthly, plus interest and the finance company's margin. That means the things that protect a car's value, which we set out in the guide to reducing depreciation and lease costs, are the same things that decide whether you face a bill at the end of a lease.
The costs you can plan for: servicing, tyres and wear
Servicing and consumables are the most predictable line in the budget, and the easiest to underestimate. A set of tyres on an ordinary family car is several hundred pounds every 20,000 to 30,000 miles; brake pads and discs, batteries and wiper blades arrive on their own schedules; and an aged timing belt or a worn auxiliary belt can turn a service item into a recovery-truck bill if it is ignored. The maintenance and safety section covers what the checks are and when they fall due; the running-cost point is simply that a car with a full service history depreciates less and fails its MOT less often, so the money spent on maintenance comes back at resale.