The Rising Cost of Motoring in 2025
Running a car in the UK has never been cheap, but the total cost of motoring has climbed steadily over the past decade. The average motorist now spends around £6,980 per year to keep their car on the road — roughly £580 per month or £134 per week. That figure encompasses fuel, insurance, depreciation, VED (road tax) and routine servicing.
Depreciation: the hidden heavyweight
Depreciation remains the single largest expense for most car owners, accounting for approximately 37% of total running costs. A brand-new car typically loses 15–35% of its value in the first year alone, and a further 50–60% over three years. The used car market correction that followed the post-COVID price spike has normalised somewhat, but average depreciation in 2025 still sits at around £2,550 per year for a mid-range vehicle. Buyers who choose a car that is two to three years old can avoid the worst of this initial hit.
Insurance premiums continue to climb
Car insurance has been the fastest-rising component of motoring costs since 2022. The average comprehensive premium in 2025 stands at around £1,120 — up 44% compared to the £780 motorists were paying just five years earlier. Several structural factors are behind the increase: vehicle repair costs have surged because of parts inflation and the growing complexity of modern cars. Advanced driver-assistance systems (ADAS), such as cameras and parking sensors, make even minor bumper repairs significantly more expensive. At the same time, personal injury claim values have risen, pushing up the overall claims pool.
Fuel costs: lower than the 2022 peak but still elevated
After reaching record highs in 2022 when petrol briefly topped 190p per litre, pump prices have retreated but remain well above pre-pandemic levels. The average UK motorist covering 10,000 miles per year now spends approximately £2,180 on fuel. Electric vehicle owners enjoy substantially lower energy costs — typically around £500 per year — though higher insurance and purchase prices partially offset this saving.
VED and servicing
Vehicle Excise Duty (VED) and servicing make up a smaller but still meaningful share of the total. Standard-rate VED for most petrol and diesel cars is £190 per year, with first-year rates varying by CO2 emissions. From April 2025, zero-emission vehicles will begin paying VED for the first time, albeit at a reduced rate. Servicing and repair costs have nudged upward in line with wage inflation in the motor trade, averaging around £860 per year.
Tips to reduce your motoring costs
While some costs are difficult to avoid, there are practical steps every driver can take. Buying a car that is two to three years old significantly reduces depreciation. Shopping around for insurance each renewal — rather than auto-renewing — can save £200–£400. Maintaining correct tyre pressures and adopting a smooth driving style can improve fuel economy by 10–15%. Finally, sticking to the manufacturer’s service schedule helps prevent small issues from becoming expensive repairs. Use the calculator above to estimate your own annual costs based on your mileage, fuel type, vehicle value and location.