Back to Car Ownership

The real costs of running a car

Car running costs, Money

For years, fleet managers have had tools at their disposal to help establish how much a car costs to run, but these costly products have always been out of reach of the individual – and they’ve always been built around a car’s list price when new. How much more useful would it be as a consumer, to be able to access a tool that gives you the true cost of running a car, even if you buy it used? That’s what we thought, which is why we’ve developed a Total Cost of Ownership tool (TCO) tool which spells out the running costs for most of the makes, models and derivatives of car that have been sold in the UK since 2007 and includes the depreciation cost for cars from 2014.

Many people make the mistake of thinking that the cost of running their car is largely down to how much fuel it uses, but it’s much broader than that. Different models and derivatives of car depreciate at different rates, they use different amounts of fuel, road tax costs can vary and their servicing requirements are often significantly different too. All of these costs can be distilled down to one simple figure – the cost per mile. This is what the Total Cost of Ownership tool allows you to calculate. Simply choose the engine, transmission, bodystyle and trim level and we’ll tell you how much it costs to run over three years and 24,000 miles – although you can personalise it by entering your own mileage and insurance costs.

The results can be surprising because changing just one aspect of a car can make quite a difference to how much it costs to run. Many car buyers are currently torn between petrol and diesel because the latter was always assumed to be the cheapest to run, but bad press has had some worried about a lower demand for such cars, adversely affecting their values. The reality so far is that while sales of new diesel cars may have suffered, the used market is still extremely healthy. Also, whereas the decision used to be only between petrol and diesel, buyers can now opt for electric (EV), hybrid and plug-in hybrid (PHEV) too – and the TCO tool offers an insight into which is the cheapest to run.

Putting it to the test
The Audi A3 Sportback is available in petrol, diesel and plug-in hybrid forms. From a price point of view, because the latter is so costly to buy, the only comparable petrol-engined A3 is the performance-oriented S3 while the most costly diesel edition is thousands of pounds cheaper. Meanwhile the significantly cheaper 1.5 TFSi and 2.0 TDi Sportbacks are more directly comparable from a power and performance perspective. All of the cars chosen are five-door cars with an automatic gearbox (the e-tron PHEV comes only in auto form), registered in 2018.

In each case an annual mileage of 8000 is assumed, along with insurance and vehicle tax costs of £500 and £140 respectively per year (the latter is £130 for the e-tron, as an alternatively fuelled vehicle), which totals £1920 over three years (£1890 for the e-tron); this is also the case for the tables later on. It’s the last column that you need to focus on – the cost of running each car for those three years with the final figure being the cost per mile. Using the manufacturer’s official fuel consumption figures the plug-in hybrid is the cheapest A3 of all to run, despite it being the most expensive to buy. However, real-world fuel costs are likely to be higher unless you’re able to drive the car using electricity most of the time.

What’s interesting is that even the A3 derivatives that put a focus on economy cost more to run than the e-tron plug-in hybrid option. The e-tron’s cost per mile is likely to be a little higher because of those real-world fuel costs, but what’s undeniable is the fact that the more mainstream petrol and diesel variants have much the same running costs; the smaller petrol of the two is just two pence per mile more expensive to run, while the bigger petrol engine is around four pence per mile cheaper to run than the bigger-engined diesel.

Looking at other factors

Because you can look up just about any derivative of any mainstream car from the past dozen years, it’s easy to see how much of a difference swapping an engine, trim level, body style or transmission can make. Taking the 2018 BMW 3-Series as an example:

What’s interesting here is that whether you choose a petrol engine or a diesel, a manual gearbox or an auto, there’s surprisingly little difference in the running costs. Buy a petrol-engined automatic 3-Series and you’ll pay just 0.1p per mile extra to run it compared with the diesel alternative – meaning the diesel versions aren’t always much cheaper to run. This is because while the forecast levels of depreciation are very similar and the diesel costs slightly less to maintain, it’s hard to claw back the significantly higher price that you’re paying to buy the car in the first place.

And finally…

It’s easy to assume that key rivals which are priced similarly to each other must all cost much the same to run. But is this the case?

Taking three of the most popular small family hatchbacks of 2018, in diesel form the Volkswagen Golf is significantly cheaper to run than its rivals the Ford Focus and Vauxhall Astra. However, opt for petrol and it’s the Vauxhall that’s just about the cheapest to run. What’s perhaps most interesting is that while there’s a 5p per mile difference in running costs between the petrol and diesel versions of both the Ford and Volkswagen, whether you buy the petrol or diesel-powered Vauxhall, the cost per mile is pretty much the same.

Richard Dredge

March 2019

Try out the new TCO tool for yourself visit