Seven in 10 drivers underestimated annual motoring costs

A new study, published by the Economic and Social Research Institute (Esri) Behavioural Research Unit, funded by the Department of Transport, found that many drivers overlook substantial costs when thinking about the financial implications of car ownership.

Iain Reid, global content director at Carwow, attributes this to the fact that not all costs associated with running a car are as visible as others, such as fuel.

He said: “It’s easy to underestimate the true cost of running a car because not all of the costs are as visible as filling up with fuel. Carwow’s own analysis found that MOTs, servicing, insurance, tax and depreciation can add up to more than £5,000 a year.

“Taking the costs into account – particularly insurance and repairs – is particularly important with newer brands, where a low purchase price doesn’t necessarily mean lower overall motoring costs. Our investigation into Chinese cars found that some were significantly more expensive to insure than comparable models, while others were difficult to insure at all. In one case, the only insurer able to provide a quote charged almost twice the average premium of its established-brand equivalent.

“Drivers should therefore look beyond the headline price of a car and consider the total cost of ownership when working out what they can really afford. Insurance, tax, servicing, depreciation and even the availability of parts and repairs can all have a significant impact on what a car actually costs to own.”