I’ve been driving for 15 years now, and in that time I have owned 5 different cars. Each of them had their good and bad points, of course. However, one thing I have always been hyper aware of is their running costs. Today, I thought I would share some ways to monitor your car’s running costs and it’s value. Personally, I think it’s one of the most important things to know about your car. Especially when it comes to budgeting effectively.
How to monitor your car’s running costs
Your car’s running costs don’t just include the car tax and insurance. You must also include the cost of the annual service, breakdown cover, MOT and fuel costs. If you want to effectively monitor your car’s running costs, you should make a list of all of these. For example, our last car was a Vauxhall Insignia, and the costs were:
- Tax: £260 per year
- Insurance: £684 per year
- Breakdown Cover: £144 per year
- Service / MOT: £160 a year (roughly).
- Fuel: 30mpg (1 gallon is around 4.5 litres, or around £5 per 30 miles). We do around 400 miles a month, so that was around £140 a month or £1680 per year.
When you take all of that into account, it cost £2928 per year to keep our car on the road. That’s not taking into account any repairs, replacement tyres or insurance excesses. Businesses can use CAP HPI to check their fleet vehicles running costs quickly and easily.
Why monitor your car’s running costs?
Personally, I think it’s a good idea to keep track of the costs. Firstly, so you can work out easily whether it’s time to upgrade. We got a new car last month, and our Peugeot 3008 costs us over £1000 less per year to run. Thankfully, we don’t need to worry about breakdown cover or the MOT, now. We pay less car tax, and get 45mpg in the new car, so we spend much less on fuel too. Of course, you do need to buy your new vehicle if you choose to upgrade. However, by monitoring your vehicle’s value, you can make sure you get the best possible amount for your old car.
How to check your car’s value
A quick search on most car websites will tell you what your car is currently valued at. It is worth doing this before your car has it’s annual service or MOT and setting a budget which you don’t want to go over. For example, our insignia was valued at £2600 last May. It needed £460 worth of work to get it through the MOT, but we were warned it would need close to £1000 spending on it to get it through the next one. We didn’t see the point in spending £1000 on a car which wouldn’t be worth that much in a year or two’s time.
Choosing a new car
If you want to make sure your new car is cost efficient, it’s definitely worth making a list of these costs when comparing potential vehicles… Miles per gallon (MPG), annual car tax amount, car insurance group. Group 1 is the cheapest, and group 50 is the most expensive, so the lower the number, the better.
If you follow these tips, you’ll definitely be able to make sure your car fits your budget, rather than having to adjust your budget to fit your car. Finally, if you’ve found this post helpful, feel free to check out more of my motoring blog posts.