The true cost of your next car
Finance is just the start. Add fuel or electricity, insurance, tax and servicing to see your real monthly cost — and how many pence every mile actually costs.
True monthly cost
£614
= £401 finance + £213 running
- Finance £4,816
- Fuel £1,262
- Insurance £750
- Servicing £350
- Road tax £190
Per year
£7,367
Pence / mile
81.9p
Illustrative only — not a personalised quote. Your actual rate depends on lender, credit profile and vehicle. WeCarFinance is FCA regulated.
In short
The finance payment is rarely more than two thirds of what a car costs to run. Insurance, fuel or charging, road tax, servicing, tyres and MOT typically add a substantial amount every month. This tool combines all of them so you can compare cars on true monthly cost rather than the headline finance figure.
- Costs included
- Finance, insurance, fuel, tax, servicing, tyres
- Most volatile cost
- Insurance and fuel
- Most forgotten cost
- Tyres and MOT
- Comparison basis
- Cost per month and per mile
What does a car actually cost to run each month?
People choose cars on the finance quote and then discover the rest. Two cars with identical monthly payments can differ by a large amount once everything else is counted, because insurance group, fuel economy, tax band and service intervals all move independently of price.
| Cost | How it behaves | What moves it most |
|---|---|---|
| Finance payment | Fixed for the whole term | Price, deposit, term and APR |
| Insurance | Annual, can swing sharply | Insurance group, your age, postcode, claims history |
| Fuel or charging | Varies with your mileage | Economy or efficiency, and whether you charge at home |
| Road tax (VED) | Fixed annual amount | CO2 emissions, fuel type, list price over £40,000 |
| Servicing and MOT | Annual, predictable | Manufacturer schedule, age of the car |
| Tyres and consumables | Irregular but inevitable | Wheel size, driving style, annual mileage |
Depreciation is the seventh cost and the largest of all, but it only becomes real when you sell. On PCP it is effectively built into your monthly payment already, which is one reason the two products are hard to compare on payment alone.
How should I read my result?
The total monthly figure is the number to budget against — it is what the car will genuinely take out of your account across a year, averaged. The cost-per-mile figure is the one to use when comparing two cars, because it normalises for how much you actually drive.
Run the tool twice, once for each car you are torn between. The gap in total monthly cost is usually far larger than the gap in the finance quotes, and it sometimes points the opposite way.
How do I lower the total cost rather than just the payment?
- Check the insurance group before you commit. Get a real quote on the exact model and trim — group numbers alone hide a lot of variation.
- Match the fuel type to your mileage. Petrol suits lower annual mileage, diesel needs high motorway mileage to justify itself, and an EV only makes financial sense with reliable home or workplace charging.
- Choose the smaller wheel option. It improves ride, economy and tyre cost simultaneously, and costs less up front.
- Look at the service schedule, not just the servicing cost. A car with two-year intervals costs materially less across a four-year agreement than one needing annual attention.
- Check the VED band. Cars with a list price over £40,000 attract an additional rate for several years, which catches people out on nearly-new purchases.
Should I include depreciation in the comparison?
It depends what you are deciding. If you are choosing between two cars you intend to own outright and sell in five years, depreciation dominates everything else and belongs in the sum. If you are on PCP, the lender has already priced the expected depreciation into your monthly payment, so counting it again double-charges you.
As a rule of thumb, cars lose the largest share of their value in the first year and the curve flattens after three. That is why a two or three year old car is often the strongest value in the market: someone else has absorbed the steepest part of the drop, and the car still has years of reliable life ahead of it.
Common mistakes to avoid
Comparing cars on the finance payment alone
Compare total monthly cost. The finance figure is often the part where two cars are most similar and running costs are where they diverge.
Estimating insurance instead of quoting it
Run a real quote on the exact model, trim and your own postcode before committing. Estimates are wrong by hundreds far more often than they're close.
Assuming diesel is cheaper
Diesel needs consistently high mileage to repay its price premium and higher servicing costs. Below roughly 12,000 miles a year, petrol usually wins.
Forgetting tyres, MOT and consumables
Budget for a set of tyres across the agreement. On larger wheels this is one of the biggest single unplanned costs owners face.
Sources and review
- GOV.UK — Vehicle tax rates
- MoneyHelper — The cost of running a car
Last reviewed 5 August 2026 by the WeCarFinance editorial team. Figures on this page are illustrative and are not a personalised quote.
Frequently asked
What does 'total cost of ownership' actually include?
Finance payments, fuel or electricity, insurance, road tax (VED), servicing, tyres and MOT. We don't include depreciation as a cash line because on PCP the balloon captures it, and on HP you keep the car — but expect a used car to lose 10–20% per year in the early years.
Are EVs really cheaper to run?
In fuel and tax, generally yes — home charging at ~7–15p per kWh works out to 2–4p per mile versus 12–18p for a petrol equivalent. Insurance and finance can be higher, and from April 2025 EVs pay standard VED. The tool lets you flip between EV and petrol/diesel to see your numbers.
Where do MPG and mi/kWh figures come from?
Use your car's WLTP combined figure, or your own average from the trip computer. For an EV, mi/kWh (efficiency) is the equivalent of MPG. 3.5–4.5 mi/kWh is typical for a mid-size EV; 40–55 mpg is typical for a modern petrol.
Why is pence-per-mile useful?
It's the great equaliser — it lets you compare a cheap car with high running costs against an expensive car that's cheap to run. Under 30p/mile is efficient; over 60p/mile is expensive and usually means either a big car or big finance.
What's included in total cost of ownership?
Finance payment, insurance, fuel or charging, road tax, servicing, MOT and tyres. Depreciation is sometimes added when you own the car outright, though on PCP it's already reflected in the monthly payment.
How much should I budget for running costs beyond the finance?
It varies widely by car and driver, but insurance, fuel, tax and maintenance commonly add a meaningful amount on top of the finance payment. Use the tool with your own mileage and a real insurance quote rather than a rule of thumb.
Is an electric car cheaper to run?
On fuel and servicing, usually yes — especially with home charging on an off-peak tariff. Public rapid charging narrows the gap considerably, and insurance can be higher, so the answer depends heavily on how and where you charge.
Why is my insurance quote so much higher than expected?
Insurance groups reflect repair cost and performance, not price. Postcode, age, claims history and even the trim level move the premium substantially. Always quote the exact car before you commit to it.
Does a newer car cost less to run?
Often, on servicing and reliability, and it may sit in a lower tax band. But it depreciates faster and typically costs more to insure, so the total picture isn't automatically better.
How do I work out cost per mile?
Divide your total annual cost by your annual mileage. It's the fairest way to compare two cars, because it accounts for the fact that a car you barely drive costs less in fuel but the same in finance, tax and insurance.
Should I include depreciation if I'm on PCP?
No. The lender has already estimated the car's future value and built the depreciation into your monthly payment. Adding it again would count the same cost twice.
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