FinToolSuite

Annual Car Running Cost Calculator

Updated April 17, 2026 · Budget · Educational use only ·

All-in annual cost: fuel, insurance, tax, servicing, depreciation.

Calculate the full annual cost of car ownership: fuel, insurance, road tax, servicing, tyres, and depreciation. See true per-mile cost.

What this tool does

Enter annual mileage, fuel efficiency, fuel cost per litre, insurance, road tax, servicing, and depreciation. The tool calculates annual running cost plus cost per mile.


Enter Values

Formula Used
Annual fuel cost (miles / mpg × 4.546 × price per litre)
Insurance
Road tax
Servicing
Tyres
Depreciation

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Disclaimer

Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.

The true cost of car ownership is typically 30-60% higher than headline monthly payment or purchase price implies. Most owners focus on fuel as the main running cost, but across a year, insurance, depreciation, servicing, tyres, and road tax often exceed fuel spending. Getting to a realistic annual number changes how people think about vehicle choices — the difference between a 20k and 30k car isn't 10k, it's roughly 10k plus meaningful difference in annual running costs for years.

The categoriesfuel (annual mileage × cost per mile based on efficiency), insurance (annual premium), road tax/registration (varies by jurisdiction and vehicle), servicing (annual service + periodic major services averaged), tyres (roughly 300-600/year averaged depending on mileage and type), depreciation (by far the largest hidden cost — typically 10-15% of value per year for new cars, less for older).

Per-mile cost is the useful denominator. Once you know your all-in cost per mile, decisions about whether to drive vs use public transport, rent a car vs own, or keep vs replace become much clearer. Typical per-mile ranges: 0.40-0.80 depending on car and usage. Commercial per-mile (the tax authority mileage allowance) is 0.45 for first 10k miles — useful reference.

How to use it

Enter annual mileage, fuel efficiency (MPG or litres/100km depending on your preference), fuel cost per litre, annual insurance, road tax, annual servicing estimate, tyres budget, and annual depreciation. The tool produces total annual cost and per-mile cost.

What the result means

Annual cost is the real budget figure for car ownership. Per-mile cost is the decision tool — useful for comparing alternatives and deciding whether specific trips are worth the marginal cost. Most people are surprised how high per-mile runs once all categories are counted.

Budgeting tool, not financial advice. Costs vary by vehicle, location, and driving pattern.

Example Scenario

Running a car 10,000 miles miles produces an annual total based on the inputs provided.

Inputs

Annual Mileage:10,000 miles
Fuel Efficiency (MPG):45 MPG
Fuel Cost per Litre:1.45 £
Annual Insurance:700 £
Road Tax:180 £
Annual Servicing:350 £
Annual Tyres:250 £
Annual Depreciation:1,500 £
Expected Result£4,444.82

This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.

Sources & Methodology

Methodology

Converts MPG to litres (÷ 4.546), multiplies by miles to get fuel litres, then by price for fuel cost. Sums all categories for total. Divides by annual mileage for per-mile cost.

Frequently Asked Questions

How do I estimate depreciation?
New cars lose 15-25% in year 1, 10-15% in years 2-3, 8-12% in years 4-5, then flatter. Older cars depreciate less in absolute terms. For 3-year-old 15k car, expect 1,200-1,800/year. For newer cars, roughly 12% of current value.
Should I include finance interest?
Yes if relevant. If you have a PCP or HP agreement, the interest portion is a real annual cost. Add it to one of the categories (or create a separate line). Cash-purchased car skips this line.
What about parking and tolls?
Not included by default. If you have regular parking costs (season permit, monthly parking at work, regular toll roads), add to total as an additional line. Often 500-2,000/year for urban drivers.
Is the per-mile figure realistic?
typical all-in per-mile is 0.40-0.80 depending on vehicle and usage. the tax authority mileage allowance (0.45 first 10k miles) is a reasonable midpoint reference. Your specific number depends on vehicle and mileage pattern.

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