Driving a car is a great way to travel around the UK. It is also very useful for daily living and for getting to working when you live outside the major cities in the UK or even if you just live outside of London. However, if you are a visitor in the UK and you are only living in the UK for two years, is buying a car and paying for all the running costs, really worth it?
I bought a car in the UK and used it for the entire two years I lived there. I have written this guide to tell you all the costs of buying and owning a car in the UK to help you make your own decision on whether to get a car while you live in the UK.
How Much Does it Cost to Buy a Car in the UK?
It depends on the kind of car you want. However, if you are planning to get a car for exploring the UK and to do short daily trips to work and to the shops, you can do all of this with a small car. A small car that is reliable, cheap and easy to park. This is why I will be talking about the costs of buying a small car but the sky’s the limit when it comes to expensive cars.
The current starting prices for new small cars in the UK ranges from £17,000 to £27,000. These are the starting prices for some popular small car models (as of Feb, 2022):
Vauxhall Corsa £17,380
VW Polo £18,285
Honda Jazz Ex £22,930
Toyota Yaris £20,820
Ford Fiesta £17,070
Ford Focus £22,965
Kia Sportage £26,745
If you are a visitor, it is important to consider the currency conversion as this will significantly affect what you can buy. For an Australian you need to double these prices to work out roughly how much it will cost you in Australian dollars.
A used car is a much better choice if you want to keep costs to a minimum. Used cars are £5,000-7,000 cheaper and can be even cheaper if you choose older car models.
This is what I did and I bought my 2009 Toyota Yaris Hatchback VVT-i TR for £4700. I found it through autotraders.co.uk. They offer a vehicle history check fee for £15 which I paid for too. It took me a while to find it but it paid off and it was a great car for the two years I owned it.
What are the Average Running Costs for a Car in the UK?
The average running cost for a car (excluding the purchase of the car) in the UK is approximately £2500. Here is a breakdown of all the running costs for a car and what I paid for mine:
Car insurance £960 for the first year, £920 for the second year – I used Admiral car insurance. They gave me the best price for the compulsory car insurance I needed. Car insurance, even the mandatory minimum, is expensive for Aussies/people without a no claims discount earned outside the UK. However, some UK car insurance companies will take this into consideration now including Admiral Direct, Churchill, and Marshmallow insurance.
UK vehicle tax rates (road tax) £140 – This is a tax you need to pay every 6-12 months so you can drive your car on UK roads.
Annual MOT £20-40 annually – This is a mandatory annual test for cars over three years old which ensures your car meets road safety and environmental standards.
Car Service £200 annually – This is usually annual and coincides with when your MOT is due.
Application for exchanging your Australian/selected foreign licences for a UK driving licence £43 – You will have to do this after one year living in the UK.
Petrol £1000 annually – Try to fill up at the supermarket petrol stations as they typically have the cheapest prices.
Car parking permit £30 annually (I only paid this for one year) – If you live in a city finding free car parking is horrendous. However, you can apply for a car parking permit at your local council which allows you to park on the street outside your home. I highly recommend getting this!
Car washes £10 per wash – You will need to have a few washes in winter when your car gets very muddy.
Car accessories (windscreen scraper, anti-freeze coolant etc) £50 – You will need this when it gets icy.
Car fines £260 – I would consider myself a pretty careful driver. That being said I did get my fair share of fines in the UK. Mostly for staying in carparks too long.
Total cost of owning a car for two years in the UK: £9783
Total cost of owning a car for two years in the UK minus the sale of my car (£2700): £7083
Annual cost for owning and running my car in the UK for 2 years: £3542
Annual cost for running my car (excluding the car purchase price): £2541
UK Car Insurance
You cannot drive a car on UK roads without car insurance. The legal minimum car insurance you need is third party insurance.
If you are a visitor to the UK, expect it to be very expensive. Many UK car insurers do not take into account any previous driving experience outside the country. I decided to use Admiral Direct as they were one of the few companies happy to insure me. However, when I signed up I couldn’t get them to take into consideration my safe driving record in Australia with zero claims. This has changed and Admiral Direct now does take this into consideration (Make sure you call them. Do not just sign up online). So does Churchill car insurance and Marshmallow insurance. This one step will reduce your premiums by £400-500/year.
I tried to reduce my premiums by increasing the excess. They did offer to reduce my premiums by adding a black box to my car which basically reads the exact speeds you are going and increases the premium if you go over the speed limits. I declined this offer because it was way too restrictive.
My insurance premiums were high:
- First year: £960
- Second year: £920 (without any claims in the first year)
When they take into account your previous claims-free driving experience back home expect to pay £400-600/year.
UK Car Services and MOT
An MOT is a test you need to get for your car to make sure it meets safety and environmental standards. If your car is new you won’t need an MOT for the first three years. However, if your car is over three years old then you need to get an MOT annually. These tests are cheap only costing £20-40. However, it is the car service which can be expensive. Car services are recommended once a year or every 12,000 miles, whichever comes first, and costs will vary depending on any additional repairs which need to be completed to pass your MOT. Hence your car service and MOT is usually done at the same time.
Buying Petrol (Gas) in the UK
There’s a big variation in prices. I recommend going to the petrol (gas) stations next to big supermarkets for the cheapest prices, for example a Tesco, Sainsbury or Asda servo. Avoid petrol stations on Motorways. They can have quite big mark ups on prices.
Vehicle/ Road Tax
This is a tax you will need to pay to be able to drive your car on UK roads. When a car is first registered you will need to pay vehicle tax for the first 12 months based on the car’s carbon dioxide emissions and the type of fuel it uses. After this period, you will need to pay vehicle tax every 6-12 months.
Car Washes
There are lots of cheap hand car washes all over the UK. A standard car wash will set you back approximately £10.
Car Accessories
This includes a windscreen ice scraper, anti-freeze coolant, windscreen wash liquid, car phone holder and car seat covers: £50
Parking in the UK
Parking can be quite expensive in the UK. In major cities expect to pay £1/hour for off street parking and £1-2/hour for on street parking. In London, these prices double. This is why I would not recommend driving into London especially when you will also need to pay daily congestion charges and Ultra low emission zone charges too.
Fortunately, free parking is usually easy to find in smaller UK towns and villages. You can also park for free in some shopping centres, private car parks and supermarket car parks for a restricted time before they start charging.
UK City Car Parking Permits
In many cities, if you have a home which does not have off-street parking you can apply for a local car parking permit. This is essential if you have a car and you live in a major UK city as most street parking is busy and has restricted parking hours. You can apply for a car parking permit online on your local council’s website. The cost of permits is based on your council, vehicle carbon dioxide emissions and how many permits you require. I only paid £30 for mine and it allowed me park on the street near my home for as long as I wanted, any time of day.
Toll Roads and Bridges
There are very few toll roads and bridges in the UK. Only 23 in the country and they are well marked. Common tolls include the M6 motorway in the West Midlands (£5.50) and the Clifton suspension bridge (£1).
Driving Fines
If you are caught speeding for the first time you will receive a letter in the post. It will give you two options:
- Attend a Speed Awareness Course – you will need to pay £90 to attend this course.
- Pay a £100 fine and receive 3 demerit points
I chose option 1 to avoid receiving demerit points and a reason for my insurer to increase my premiums even more.
Parking fines: It is surprisingly easy to get parking fines in a city. Local parking wardens will patrol busy streets regularly. These fines vary between different council can be up to £130 in London!
It’s important to also beware of supermarket and grocery car parks. They may not have a ticket entry or gate but many will hire a private company like Parking Eye to record when you enter and exit and they will fine you if you stay too long. Fines can be £40-70.
London Congestion Charges
In order to reduce traffic congestion and pollution the city of London charges fees for driving there.
- Daily congestion charge: £15
- Ultra low emission zone charge of £12.5 daily if your car doesn’t meet the low emission standards
There are some exceptions for the above charges. The daily congestion charge does not apply between Christmas and New Year’s Day (inclusive). Furthermore, the Ultra low emission zone charge does not apply on Christmas day!
There is also a Low emission zone charge in addition to the above two charges which covers driving in greater London but this applies mainly for vans, lorries, minibuses and coaches. You can read more about this here.
Selling Your Car in the UK
You can sell your car privately, to a used car dealership or to a car buying service like Webuyanycar. You will get the best price selling your car privately but it will require a lot of time and effort. I sold my car to Webuyanycar knowing I would get a much lower price but without wasting any of my time. In my opinion, spending that time hanging out with my UK friends before flying home was much more important to me but each to their own.
I sold my car for £2700.
This makes the grand total of owning a car for two years in the UK: £7083
It is expensive but not too expensive and I thought it was well worth it for my circumstances. Hopefully this will help you decide whether you should buy a car in the UK.
If you would like to learn more about driving in the UK and all the ins and outs of getting a UK licence, buying and selling a car in the UK and the main UK road rules you need to know you can check out our article on Driving in the UK: Advice for Aussies.