Are you considering buying a car? If so, it’s essential to know what it costs to have a car. There are many costs that need to be considered before signing the sale. In addition to fuel and repairs, it’s important to understand car finance schemes - and then you must be prepared for the car to lose value as soon as it is purchased.

In this post, you will learn more about the cost of a car. You will get an overview of the many fixed and variable costs you need to be prepared for.

What are the fixed costs when buying a car?

Below is a list of fixed costs you should consider before committing to buying a car. When we talk about fixed costs, it means that they do not change according to the use of the car. You should therefore be prepared to finance most of these expenses.

The car

Many people who choose to buy a new car take out a car loan. It should be included as a fixed monthly expense in your car budget. The loan can be financed mainly in two ways: through your bank or through your car dealership partner.

The price of a car loan depends above all on the amount of money you need to borrow. In addition, the price also depends on the application fee as well as the interest rate at which you can get the loan.

There can be a big difference in the cost of a car loan between different cars and companies. As such, it is advisable to compare different car loan offers before choosing how you want to finance your car.

Car Insurance

Insurance is one of the biggest expenses for car owners (particularly new drivers). This is because car insurance is designed on an individual basis, making it a complex expense that is difficult to predict.

The fact that insurance is individually designed means that it is calculated based on your age, location of residence, driving experience, type of car...

A car's insurance can vary from company to company. Therefore, if you want to save money on your car insurance, it is a good idea to compare the offers of different insurance companies before choosing one.

Roadside assistance

Roadside assistance is one of the most popular add-ons among car owners when choosing car insurance. Some insurance companies also offer free roadside assistance as part of their insurance policy.

Roadside assistance can be paid for either as a subscription or as a flexible contract. Most car owners prefer the fixed subscription, as it means roadside assistance is included in the total car insurance.

Tax rate (VED)

As a car owner, you must be prepared to pay tax on your vehicle. Tax rate, also called vehicle excise duty (VED) is a tax you will probably have to pay in order to first register a new car. After that, you will have to pay every six or twelve months. This tax applies to both brand new cars or used cars. It is calculated on the car age and CO2 emissions.

However, there are some exceptions to this tax. It does not concern drivers with disabilities, electric and historic vehicles. It is also important to remember that even if you don’t have to pay any tax, you still have to register your car.

Also, there is a new tax rate for 2021/2022. In fact, if you consider buying a car priced over £40,000, you will have to pay £335 extra every year for the first six years.

MOT

MOT check is mandatory for most vehicles over three years old. Once completed, it lasts for a year. It analyses possible failures that could harm car owners and the environment. If you do not get your car inspected within the MOT deadline, you risk receiving a fine.

Variable costs

When you have analyzed the fixed costs of a car, remember to focus on the variable costs.

Fuel

Gasoline, diesel or electricity are some of the main variable costs of using a car. Your consumption will of course vary depending on your driving. As such, it is difficult to set aside a precise amount for fuel in your budget until you’ve been driving for a few weeks. In any case, make sure you do not set the budget too low so that you are not surprised by the cost of fuel.

We recommend that you keep track of your monthly consumption. This way, you can calculate your average fuel consumption so you know how much fuel your car is costing each month.

Maintenance

Your maintenance costs depend on how much you drive and how you drive. Either way, repairs may be necessary. Maintenance costs include, among other things, tyre change and car servicing.

Tyre change, car servicing and repairs

Your car's tyres wear out during use. In addition to changing between summer and winter tyres, it is strongly recommended to replace them when you have driven between 25,000 and 35,000 miles.

Your car also requires a service inspection after certain mileage intervals. On average, it is advisable to do a service every year or after around 12,000 miles. However, this can vary greatly depending on your type of vehicle. For more details, we advise you to consult the maintenance log book for your car.

The price for car servicing, tyre change and repairs depends a lot on the garage you choose. It is important to compare prices and ratings in order to find the best deal for your car. Here you can use Autobutler to your advantage.

With Autobutler, you can receive quotes on things like car servicing and tyre change from quality garages near you. That way, you can easily compare offers and choose the right solution for your car at the best price.

Car depreciation

Car depreciation varies greatly depending on the model of the car. On average, a new car loses around 20% of its value in the first year.

Although the loss in value is less over the following years, you should expect the car to depreciate by around 50% over four years.

Below you can see the average annual discount on a new car over the first 5 years.