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The costs of running a car
Any car buyer should be fully aware of the running
costs of their vehicle. Much will depend on the
vehicle itself, the amount of miles you will do, how
long you plan to keep the car and the type of driving
you will do
Insurance
Insurance will depend on many factors including:
- your age
- your driving history (insurance companies don't
like losing money and prefer drivers who don't claim)
- the insurance group of the car
- where you live and where you keep the car
Depreciation
This is generally the largest cost of motoring.
Depreciation is the difference in the cost you pay for
your car and the amount of money you get back from it
when you sell it. Many car magazines will give
you a guide to the depreciation of a new vehicle usually
called "retained value after three years".
This is expressed as a percentage. In simple terms
a 33% retained value means that for every £100 you pay
for the car it will only be worth £33 after three years.
Different cars depreciate at very different levels.
To illustrate the point:
A new Vauxhall Omega 2.2i 16v GLS has a retained value
of 21%. Costing £18,195 new it will only be worth
an estimated £3,820 after 3 years / 36,000 miles.
Compare this with BMW 325ti SE which has a retained
value of 59%. Costing £22,640 new (£4,445 more
than the Vauxhall) will be worth approx. £13,357 after
3yrs/36,000 miles. That's more than £9,000 different
to the value of the Vauxhall. I guess the lesson
here is that you can spend more money on a car and be
better off financially in the long term
Servicing and maintenance
Again servicing and maintenance costs will depend on
your vehicle. If it is under the manufacturers
warranty many insist that you have the vehicle services
by a franchised dealer. This is often very expensive
and can be poor value for money. If your car is
not covered by a manufacturers warranty you can get
it serviced where you like. However, you need
to be aware a car with a full service history from a
main dealer is more desirable when you come to sell.
You need to weigh up the costs. Don't be afraid
to shop around as it can vary between dealer
Road Tax and Congestion charges
Road Tax is now calculated on how green
your car is. The more pollution it pumps out
the more you pay. The cheapest is £100 and the
most expensive is £160 (as at Mar 2003).
Electric cars and LPG vehicles may pay a lower charge
but the real win here is if you travel to London.
Many alternative fuel vehicles are exempt from the Congestion
Charge.
Fuel
Petrol and Diesel are roughly the same price.
However, a Renault Laguna 1.9dci and the Citroen Xsara
Picasso 2.0 HDI will boast a combined figure of over
50mpg. Their petrol counter parts can offer as
low as low 20mpg dependant on the engine variant.
Even a mid ranger will tend to be about the 30mpg mark.
There used to be a penalty on Diesel vehicles in that
they required servicing more often and they had a reputation
of being gutless wonders. However, direct injection
and other technology has improved the performance dramatically
and using the Laguna as an example it only needs servicing
every 18,000 miles.
Other costs
If you have a company car you will be heavily taxed
on the benefit.
Breakdown cover is a worthwhile purchase as it can
save a small fortune if you breakdown and need to be
recovered. Shop around for the best cover and
price using our directory
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