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Cost of first car

How much will my first car cost?

The price you pay to buy a car is one thing, but that's just the tip of the iceberg compared to the ongoing costs of keeping it running, road-legal and insured. 

To get you started with thinking about these things, here's a run through of the basics for new drivers.

Car costs you can't avoid

Car insurance

The annual premium you pay will be based on a number of factors including your age, address and the model of car being insured, plus its insurance group. Shop around for the best quote, but bear in mind that insurers offering similar or lower prices may not have the same benefits. Check each policy to ensure it's got everything you need.

The premiums for new drivers can be expensive, but if you drive carefully and don't make any claims, they'll come down steadily and may drop by as much as a third after the first year.

It might be worth considering telematics (or 'black box') insurance. This tracks your driving behaviour, such as speed, cornering, braking and acceleration - scoring points that can lead to a reduction in your premium.

You can also reduce your premium by opting for a higher voluntary excess, which is the amount of money you'll have to pay in the event of a claim. By increasing your voluntary excess another £100 to £200, your annual premium may come down. However, this makes filing a claim more expensive, so always choose an excess you know you can afford.

Finally, adding a second named driver - such as a parent - could bring your premium down. Don't think you can cheat the system though by getting a parent to insure your car and add you as a named driver. That's called 'fronting' and it could get you into a lot of trouble.

For help finding and choosing the policy that's right for you, see our guide to buying car insurance.

Car tax

Officially known as the Vehicle Excise Duty (VED), it's more commonly referred to as car tax.

If your car was first registered between 1 March 2001 and 1 April 2017, the cost of the tax depends on how much CO2 it emits. This will be shown on the V5C registration document. For cars registered before 1 March 2001, VED is based on the size of the engine.

We recommend you look at how much car tax will cost you before buying a car. The cleanest cars may not pay any VED - for example, most electric cars don't.

For newer cars (registered since April 2017), there's a standard rate of VED that applies to all but the cleanest cars.

An extra charge of £310 a year applies to cars with a list price over £40,000 in the first 5 standard rate years.

Read our guide on car tax or check rates at GOV.UK.


The MOT test checks that your car meets minimum road safety and environmental standards.

If your car is over 3 years old, an annual MOT is mandatory and your vehicle must pass the test in order to legally be allowed on the road.

Get your car ready for the test:


Cars can't run on hopes and dreams, so you can expect to be paying for fuel regularly, and the more you drive, the more you pay. But there are ways you can get more out of your fuel.

Other car costs you'll need to think about

Easy ways to cut the costs of driving

Once you’ve bought your car and it’s taxed, insured and ready to rack up some miles, there's some steps you can take to lower the cost of driving:

  • Cheaper petrol: use the AA app or petrolprices.com to find the best prices on fuel, and make your petrol go further by changing your driving habits:
  1. Take it easy on the pedals - avoid sharp braking, heavy accelerating and high speeds.
  2. Check your tyres regularly – a drop in tyre pressure can increase fuel consumption.
  3. When driving at high speeds, the extra drag from open windows will use up more fuel, so turn on your air con. However, at low speeds, it's more efficient to open your windows.
  4. Declutter – extra weight means extra fuel consumption.
  • Don't delay or skip regular servicing - it keeps your car running at its best and will pick up any faults early.
  • It's important to carry out basic checks of oil level, coolant and tyre pressures every couple of weeks or so.
  • Although they may cost more to buy, electric and hybrid vehicles can be cheaper to run, with lower fuel and maintenance costs.

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* Survey of AA Driving School pupils who passed their test in 2018.