5 Ways to Reduce Your Car Running Costs

Paying the dealership and driving your new set of wheels home doesn’t end the expenses for a car. When you plan your car expense, it’s not only the price tag you have to think about but also the car running costs. We’ve prepared this helpful guide on the costs of running a car so you can try and cut back on some of them and save money in the process! 

What are the costs of running a car?

To start, the upfront costs are the most obvious ones. This refers to your expenses when you lease or finance a car, where you have to pay a deposit and then a certain amount each month. Typically, this upfront cost is fixed and, therefore, predictable. It’s the running cost that can sometimes go beyond your intended budget. 

Insurance, taxes, and covers

Car insurance, car tax and breakdown covers should also be considered even before you buy a car. You need to have insurance as it is required by law, and you won’t be able to drive without one. Of course, you need to pay taxes as well, and the cost varies depending on the type of car you have. 

Fuel and tyres

Fuel is the primary expense to consider since you need to fill up the tank to make the car run. The price of fuel is tricky to predict, volatile, and easily affected by so many events happening outside the country that could immediately cause an increase in prices. Next to fuel, another big expense is your tyres and keeping them roadworthy. You should be able to get new ones as soon as the old tyres need to be changed. If your tyres go beyond the legal tread depth, you could end up paying some hefty fines.

Maintenance, MOT and service

If you keep your car well-maintained, it will be easy to spot if your tyres or any other components of the car need to be replaced. And that leads us to another important expense, which is maintenance, MOT, and service. Taking your car for the MOT is mandatory, and if any faults are found, you need to get them fixed. That’s why it’s crucial for your car to have regular maintenance. This ensures that things will get fixed before they get worse and helps you save money by preventing the need for big, costly repair work. 

How to save money on your car expenses?

There are a number of steps you can take to keep your car running costs down. From having better driving habits, preparing your route for long trips, ensuring the car is well-maintained, and even changing your insurance coverage. 

1. Schedule regular checks and routine maintenance 

Many major repairs on cars could be prevented with regular checks. It may seem like a waste of money to take your car to the garage even if it drives well, but this actually helps you avoid spending a whole lot for a big repair job. During routine maintenance, the car’s fluids, belts, brakes, engine, and tyres are checked. If the auto mechanic sees any faults starting to emerge, it can be addressed immediately before it becomes a full-blown issue. Regular checks on your car can be as low as £75, which costs much less than major repair work that you might not have the budget for. 

2. Make adjustments to your car insurance

This one may take some work, but it will be well worth it. The first step you can take is to check with your insurance provider if they have options to lower the premiums. For example, if you take a defensive driving course, that might be able to help cut the cost. You may also change your current insurance policy and opt out of the optional covers like roadside assistance, glass coverage for the windscreen and windows, and car rental reimbursement. However, before you remove any of them, make sure that you can do without them. Finally, you may shop around for a better insurance provider that can offer similar coverage for a lesser cost. 

3. Improve your driving habits

When you drive better, you’re doing your part in keeping the road safe for yourself and other road users. Driving carefully also puts less strain on your car because you’re not aggressive in accelerating or braking. All the moving parts in your car can wear out easily, and it also makes the engine consume more fuel. Just by practising better driving habits, you can definitely save money while driving. You’re less likely to get into a road accident, your car will be more fuel-efficient, and it will be less likely to suffer from premature wear and tear. 

4. Switch to an electric car

If you’re thinking about getting a new car, consider switching to an electric vehicle. It produces zero tailpipe emissions, so you know you’re doing a good thing for the planet. Next to that, it doesn’t need fuel. EVs need to be charged, and you can do that at home, at the charging stations in various parking spaces at work or at your local business establishments like supermarkets. There are also plenty of rapid charging points all over the UK, and the cost for a full charge can be less than the amount you need to top up a petrol car.  

Electric cars are usually more expensive to buy than diesel or petrol cars, but that gets offset by their low running costs. There’s no need to buy a brand-new EV either, and you can easily find a good second-hand electric car that still drives wonderfully. You can even apply for a car loan with Carmoola and spread the cost of buying an EV into budget-friendly monthly instalments. To get an estimate of how much you need to pay each month, be sure to use the Carmoola car finance calculator.    

5. Refinance your car loan

Did you know you could get a better car finance agreement to pay off the one you currently have? This is called refinancing. Find a new lender that offers lower rates and terms that suit you better. Imagine how much you can save if you refinance your car and pay a lower amount each month. Carmoola offers car refinancing, and this might be the better deal you’re looking for. A car refinance calculator is also available to make the process a lot easier. You'll be amazed how much potentially it is possible to save!


The more you know about your car, the costs, your driving needs, and other expenses that come with owning a car, the easier it will be for you to know which ones to cut back on. Fuel is easily the biggest expense, with the average cost of running a car at £1,200 annually. It’s worth considering getting an electric car instead. Making this switch can do a great deal in keeping the monthly cost of owning a car more budget-friendly.