When most people think about getting a new car, their first question is usually: “How much will it cost me each month?” While the monthly finance payment is important, it’s far from the whole story. Car ownership comes with a number of extra expenses that can quickly add up if you don’t plan for them. Here’s a guide to help drivers budget realistically beyond their finance deal.

Creditplus is a broker, not a lender. Representative rate 23.9%.

Insurance

Car insurance is a legal requirement in the UK, and premiums can vary dramatically depending on your age, driving history, vehicle type, and even your postcode. According to the Association of British Insurers, the average annual premium is over £500, but for younger drivers or those with high-performance cars, it can be far higher.

Tip: Always get quotes before committing to a new car. That “bargain” finance deal may be less attractive if insurance doubles your monthly spend.

Road Tax (Vehicle Excise Duty)

Road tax rates depend on your car’s age, fuel type, and CO₂ emissions. For many petrol and diesel cars registered after April 2017, the standard rate is £190 per year (2025 figure), though electric vehicles are still exempt.

Tip: Check GOV.UK’s car tax calculator before signing a finance deal, especially if you’re considering larger or less efficient models.

Fuel or Charging Costs

Petrol and diesel prices fluctuate, but even at the best of times they remain a significant part of ownership. A driver covering 10,000 miles per year might easily spend £1,500–£2,000 on fuel. Electric cars, while cheaper to “fill up,” still incur charging costs — especially if you rely on public rapid chargers rather than home charging.

Tip: Work out your average mileage and calculate costs at today’s pump or kWh prices.

Maintenance and Servicing

Modern cars are more reliable than ever, but no vehicle is maintenance-free. Annual servicing, MOTs (for cars over three years old), tyres, and unexpected repairs should be built into your budget:

• MOT: £54.85 maximum fee
• Service: £150–£300 on average
• Tyres: £60–£120 each

Tip: Consider setting aside £40–£50 per month into a “car maintenance pot” to cover unexpected bills.

Depreciation

While not an out-of-pocket cost if you’re leasing or on PCP, depreciation is the single biggest cost of owning a car outright. A new car typically loses 50–60% of its value in the first three years.

Tip: If you plan to own your car at the end of the finance agreement, choose makes and models known for strong resale values.

Breakdown Cover

Some finance packages or new car warranties include breakdown cover, but not all. Basic AA or RAC membership starts around £60–£80 per year, rising if you want national recovery or onward travel.

Parking, Tolls, and Congestion Charges

If you live in or drive through major cities like London, Birmingham, or Bristol, factor in congestion charges, ULEZ fees, and parking costs. In London, that’s £12.50 per day for ULEZ and £15 for the Congestion Charge.

Conclusion

When budgeting for a new car, don’t stop at the monthly finance payment. By considering insurance, road tax, fuel, servicing, depreciation, and all the extras, you’ll avoid nasty surprises and enjoy your car with confidence.

At Creditplus, we don’t just help you find the right finance — we help you plan for the real cost of ownership. Apply online today to find an affordable finance package based on your personal circumstances.