Total cost of car ownership
Owning this example car for 3 years costs about £18,021 in total, once depreciation, fuel, insurance, road tax, servicing and MOT are added, working out at roughly £501 a month. Depreciation is normally the largest cost, and the MOT fee follows the maximum set out on gov.uk.
Where does the money actually go when you own a car?
Running a car is a stack of costs, and the loudest one, fuel, is rarely the biggest. For most cars kept a few years, depreciation is the largest single item, because the value falls fastest while the car is worth most. Insurance, servicing, road tax and the MOT sit on top, small each year but real across the ownership period. The MOT fee itself follows the maximum test fee set out on gov.uk. Adding every cost together and dividing by the years, and by the miles, turns a vague sense of expense into two numbers you can compare between cars or against not owning one at all.
What is the cost breakdown for owning this car?
| Cost | Total over 3 years |
|---|---|
| Depreciation | £11,216 |
| Fuel or charging | £3,055 |
| Insurance | £2,100 |
| Road tax (VED) | £585 |
| Servicing | £900 |
| MOT | £165 |
| Total | £18,021 |
What would this car cost to own, as a worked example?
Take a £25,000 car kept for 3 years and driven 8,000 miles a year at 50 MPG. Depreciation on that car comes to £11,216. Fuel over the same period comes to £3,055. Adding £2,100 of insurance, £585 of road tax, £900 of servicing and £165 of MOT fees brings the 3-year total to £18,021. That works out at £501 a month, or £0.75 for every mile driven. Depreciation is the biggest slice in this example, which is why buying a slightly used car often saves the most.
Common questions
What is the true cost of owning a car?
It is far more than the purchase price. Over the years you own it, a car loses value (depreciation), burns fuel or electricity, and needs insurance, road tax, servicing and an MOT. Depreciation is usually the single biggest item, often larger than fuel, yet it never arrives as a bill.
Why include depreciation if I have not sold the car?
Because the value is falling whether you sell or not. When you eventually replace the car, you get back only what it is then worth, so the drop is a real cost you have already borne. Counting it per year is the only honest way to compare cars.
What mileage and MPG should I enter?
Use your own annual mileage and your real MPG, not the official figure. Most drivers cover 6,000 to 10,000 miles a year, and real economy runs below the brochure number. Getting these right matters most for a high-mileage car, where fuel rivals depreciation.
Does an electric car change the sums?
Yes. An EV replaces the fuel line with charging, which is usually cheaper per mile at home, and road tax and servicing tend to be lower, though insurance can be higher. Enter your charging cost in the fuel box as an equivalent, or use the EV vs petrol tool for a precise per-mile figure.
What does cost per mile tell me?
It spreads every cost across the miles you drive, so you can see what each journey really costs to run. A low-mileage driver often finds depreciation and insurance dominate, making the per-mile figure high even with a frugal car.
Where does the money actually go when you own a car?
Most of it goes on depreciation, the fall in the car's value, which is usually larger than fuel over a few years of ownership. Insurance, servicing, road tax and the MOT add smaller amounts on top each year. Adding all of these together and dividing by the years and the miles driven gives a total, a monthly figure and a per-mile figure that can be compared between cars.
What is the cost breakdown for owning this car?
The breakdown lists depreciation, fuel or charging, insurance, road tax, servicing and MOT as separate totals over the years the car is kept, then adds them into one figure. Depreciation is typically the largest line for a car bought new or nearly new. The table updates automatically as the purchase price, mileage and running costs entered above are changed.
What would this car cost to own, as a worked example?
On the example figures used on this page, a car bought for the stated price and kept for the stated number of years costs several thousand pounds in depreciation alone, with fuel, insurance, road tax, servicing and MOT adding further amounts. The total is then divided by the months of ownership and the miles driven to give a monthly cost and a cost per mile.
Sources & Rate Verification
Rates verified against official statutory guidance on 6 September 2026.