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First car costs

The basics explained

The price you pay for a car is one thing. But that's just the tip of the iceberg in terms of the ongoing cost of keeping it running, legally roadworthy and insured.

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

Three costs you can't avoid by law

Car insurance

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

The annual premium you'll pay will be based on a number of factors, including your age, address, and not least the model of car being insured and its insurance group. You'll obviously shop around for the best quote, but insurers offering the same or a lower price may not give the same benefits. Do check each policy to ensure it has everything you need.

At first the premium for a new driver will be high, so be prepared. But over the next few years, and by driving carefully and not making a claim, your no-claims discount should gradually bring the price of a quote down.

Meantime, you can reduce the premium by opting for higher voluntary excess. The excess? This is the amount of money you'll have to pay in the event of a claim. By increasing your voluntary excess by another £100 or £200, the annual premium may come down. Look for this option when you get a quote online, or ask the insurer if you phone.

Insurance from the AA:

  • AA GetDriving car insurance – exclusive for AA Driving School pupils
  • Car insurance – excellent benefits, and new customers get a discount on breakdown cover


Vehicle tax

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

If your car was registered on or after 1 March 2001, the cost of the tax depends on how environmentally friendly the car is – which means the volume of CO2 it emits.

For cars registered before 1 March 2001, VED is calculated based on the size of the engine. Vehicles built before 1 January 1976 are exempt from car tax.

Read our guide on vehicle tax:



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

If your car is over 3 years' old, an annual MOT is compulsory – your vehicle must pass the test in order to continue legally being on the road.

Get your car ready for the test:


Wider costs that you can do something about

OK, you've taken care of the essentials, but you'll still have to keep your car running smoothly and efficiently.

Read our advice on how to get the best value in each of these areas:

Pass your test with us

98% of our recently passed pupils would recommend us*

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