Is The Cost Of Owning A Car Worth It?
Buying a car and owning a car are completely different types of expenses.
When you buy a car, you pay an agreed price. If the asking price doesn’t fit your budget, you do not have to purchase it. You are aware of how much you will spend before making the commitment.
This is very different from owning a car. The amount you pay will differ every year because there is no agreed price for car ownership. You can be a cautious driver who takes care of your car, yet still be faced with unpredictable expenses.
I witnessed this first-hand in my 5+ years of driving. I found ways to minimise my car expenses, yet I still spent a lot of money.
In this article, I’ll share my experiences as a car owner. You can then decide if the cost of owning a car is worth it.
How I tackled my car insurance
When thinking about car ownership, the first cost that comes to mind is usually insurance.
The cost of car insurance is dependent on many individual factors. These include your car make and model, your age and the area you live in.
I bought my first car at 18, so like all young drivers, my first year’s car insurance was unavoidably expensive. I attempted to manage this cost by:
Opting for black box insurance
I saved over £2,000 by opting for a Black Box insurance policy in my first year of driving.
Initially, I began my search for an insurer using GoCompare. This is a company that compares the prices of insurers on one platform so that they can find you the best deal.
As you can see below, the lowest price GoCompare had to offer was over £4,500. This was a lot more than I had budgeted for.
I decided to move away from normal car insurance and explore the world of black box insurance. This is when I stumbled across Tesco Bank.
Tesco Bank offered me a comprehansive black box insurance policy at £2,316.36 for my first year. This was still a lot of money, but the best price I could find at the time.
In my second year, the price of my insurance dropped by £1526.42 . I changed my car a month into my second policy and, luckily, the annual price remained the same.
By the time I reached my fourth renewal, I no longer needed a black box to find fairly priced insurance. This is because I had built up 3 years of no claims.
The graph below shows how my insurance premium changed from 2017 to now. Notice that in June 2022, my insurance price unfortunately went up. This was due to having an unclosed claim against me.
HOW MUCH I PAID FOR MY INSURANCE
Increasing my car insurance excess
Your car insurance excess is the amount you agree to pay upfront when you make a claim. By increasing your voluntary excess, you can lower your annual insurance premium.
This is something I took advantage of in my first year as a car owner. My voluntary excess was around £250 above the minimum amount.
Although this helped me lower my insurance premium, it wasn’t necessarily a good idea. As a university student, my total excess in theory was more than I could afford. I never considered that if I actually needed to make a claim, the total excess would need to be paid.
I didn’t make a claim whilst at university, but this was purely down to luck. Now, I usually don’t volunteer excess above the minimum requirement. This is because I am now fully aware that my car insurance excess may become a real upfront cost one day.
Shopping around
Every year, without fail, I get quotes from other car insurance providers.
This allows me to work out whether staying with the same insurance company is the right decision.
For the first three years, it was. Tesco Bank consistently offered me the best cover for the best price.
By the fourth year, I found better, so I left.
The never-ending cost of car maintenance
I’ve owned two cars, and both of them have required me to pay a lot on maintenance. Some people would argue that it’s because my cars were used and old. Others would say I’m just unfortunate.
Personally, I believe it’s simply because owning a car is expensive.
My MOT test is always full of "surprises
Passing a yearly MOT test is a legal requirement once your car is over three years old. The test itself costs around £45 in my local area.
Despite this, my MOT has always cost more. Why? Because there has always been something needing to be fixed to pass.
For example, this year I paid £197.06 for my MOT test and repairs. This included replacing the suspension wishbone arm (whatever that is).
In total, I’ve booked 4 MOTs since June 2018 and spent £709.91. This figure doesn’t even include how much I spent on my first car!
I’ve learned not to book my MOT test assuming the asking price is the true price. I’m always prepared for the worst and always have extra money ready.
HOW MUCH I PAID FOR MY MOT
Getting my car serviced
Getting your car serviced isn’t a legal requirement, but it is recommended. This is because it gives you a sense of security knowing that your car is in its best condition.
It reduces the chances of you running into issues that may compromise your safety in the future.
I pay to get my car serviced every year. This has cost me around £150 per service.
Self-discovered maintenance issues
Your MOT test isn’t the only time you pay for costly problems with your car.
Sometimes you’ll discover new problems yourself. Perhaps your heaters have stopped working, or your tyres have popped.
The most expensive issue I “self-discovered” was last year.
I went to drive my car in the morning to realise that there was a large dented crack in my front bonnet. I can only assume that another vehicle crashed into my car during the night and drove off.
Unfortunately, this was now an expense I had to cover. It cost me around £400 to replace my bumper.
I could have gone down the insurance route, but it wasn’t worth it. I still would have had to pay the excess charge, and my insurance would have gone up the next year as well. The total of this amount would have been more or less equivalent to fixing my car myself.
By not involving my insurers, I was also able to fix my car while keeping my no-claims bonus.
Other small but costly nuances
And as if those costs are not enough, there are still many smaller ones that add up over time.
Road tax
Unless your vehicle produces zero emissions, you need to pay road tax.
Some road taxes are higher than others, depending on the vehicle you drive.
I currently pay £14.52 a month for my Ford Fiesta.
Fuel
I’ve probably spent a ridiculous amount on petrol, a number so ridiculous that I don’t even want to know.
With petrol prices going up, the price of my full tank is nearly double what it was when I first started driving.
The last time I filled up my 1.2 litre tank, I paid £50.
Hopefully, one day the petrol prices will go back down, but this is very optimistic thinking here. Regardless of what happens, fuel will always be a fairly large expense when owning a car.
Congestion and Parking Fees
As much as you try to avoid it, there will always be times when you need to pay for parking. The price varies depending on what area you’re parking in and how long you’re staying. In 2021, I paid a total of £30 for parking on five separate occasions.
I also spent an additional £15 on the congestion charge in London. This needs to be paid when you drive through a restricted area during a restricted time.
Penalty Charges
I consider myself a cautious driver, yet I’ve still paid penalty charges. I’ve never received a speeding ticket, but I have received other types of fines.
A few years ago, I was fined £100 for leaving my car in the shopping car park for too long. The maximum stay was 2 hours, but I stayed for 20 minutes above this.
I was also fined £65 for driving my car in an area I should not have been driving. This happened when I drove my car to Croydon for the first time. Apparently, I drove my car in an area for trams and buses only.
Both of these incidents were accidents, but I still needed to pay for them. So to date, I’ve paid a total of £165 in penalty charges.
So, is the true cost of owning a car worth it?
That’s a question that only you can answer.
It depends on whether you believe the costs and benefits of owning a car outweigh the benefits of not owning a car.
For me, the answer is no. This is due to three key reasons:
1. I never used my car at university: I bought my car just before I started university. When my course began, I moved to Birmingham and left my car in London. I only drove my car when I came back to London, which wasn’t very often.
2. Most weekdays, I have no reason to use my car: I now work from home 2-3 days per week. On the remaining days, I travel by train to my office in Central London instead of driving. This means that I still have to pay for public transport quite frequently, despite owning a car.
3. I avoid driving my car on the weekend: I’m most likely to drink alcohol on the weekends because I usually spend them with friends. It is illegal to drink and drive, so I avoid driving my car on these occasions.
I love the convenience of having a car. It definitely does come in handy sometimes. But perhaps I should have waited until I needed a car to buy one.
Imagine how much money I would have saved.