Extra costs after you've got your car

There are many insurance providers and the cost of insurance varies hugely. How much you’ll pay depends on several factors, like your age, how long you’ve had your driving licence, the type of car, where you live, your annual mileage and even where you park overnight. 

You’ll also need to decide on the type of cover you want – third party, fire and theft, or comprehensive. Third party only covers you for accidents where you’re proven to not be at fault and, as the name suggests, fire and theft. Comprehensive covers you for everything – if you have an accident that’s your fault, the insurers will still pay out. It also allows you to drive other cars with the owner’s permission.

Shop around. Use comparison sites and get several quotes. The cheapest policy isn’t always the best – you’ll need to check exactly what’s covered and make sure it meets your needs, for example, do they offer a courtesy car if yours is involved in an accident and needs repairing? Some policies offer breakdown cover. If this is something you want, see whether it’s only on the road or if they also offer home start – useful if you’re at home and your car won’t start, but it may push up the price of the premium.

The policy’s excess is a key consideration, too. This is a set amount that you’ll have to pay towards any claim and you can usually choose how much you want this to be. Excesses vary between insurers and the more excess you’re willing to agree to, the lower the premium. While this may seem attractive initially, don’t get caught out. Choose an excess that you’ll definitely be able to afford to pay out in one go if you need to make a claim.

You can pay for your insurance upfront in one lump sum, or monthly. Most car insurers charge extra for paying monthly, so check before you commit.

MOT

You’ll need to get an annual MOT from an approved tester if your car is more than three years old. This is a safety check required by law to make sure your car’s roadworthy. It checks that things like brakes, lights, mirrors, seatbelts, tyres and windscreen wipers, including screen wash, are all in good working order. It also tests for emissions and dashboard warning lights. The test takes around an hour. If your car fails, you won’t be able to drive it until any problems are fixed, and it’s been re-tested and passed.

It’s important you remember to get your MOT done every year. You can be fined up to £1,000 for driving a car without a valid MOT certificate. Set up a reminder on gov.uk – they’ll send you a text a month before it’s due.

Road tax

Officially known as ‘vehicle excise duty’, road tax is an annual tax you pay to use your car on public roads. How much you’ll pay is based on your emissions – a diesel car will cost more to tax than a hybrid car. Purely electric cars are currently exempt from tax for the first year, though this may change as electric cars become increasingly popular.

It’s important to note that you have to officially tax your car, even if there’s nothing to pay. It’s quick and easy to tax your car on gov.uk. You can tax it for a year or six months at a time.

Gov.uk has more information about MOTs and tax.

Petrol and diesel fluctuate in price, sometimes on a daily basis. Supermarkets are generally cheaper and sometimes offer discounts if you spend over a certain amount in store. Some garages let you collect reward points, offering a discount after you’ve collected enough. Check garages for the best current price. There’s usually a choice between regular or premium fuel – the latter has a higher octane content and has additives designed to keep your engine clean. It’s a nice treat for your engine once in a while. 

Electric cars need charging, and there are several places to do this. Charging at home is usually the most convenient and cheapest way to keep your car going. Some supermarkets offer free charging while you do your shopping. There are many public charging points, some of which are free and some of which you have to pay for – many lampposts now double up as electric car chargers. You can download an app to find these and, if necessary, pay for your charge. If you’re on a long road trip, many motorway service stations offer rapid chargers, which range from free to one of the more expensive ways to charge your car.

Cars can be expensive, especially if something goes wrong. What looks like a small scratch on the paintwork can cost hundreds of pounds to fix. If you’re involved in an accident, the insurance will either cover the cost of repairs or, if they believe it’s ‘beyond economical repair’, they’ll offer you a payment to replace the car (though this is rarely enough to cover a like-for-like replacement). Claiming on insurance will also push up the price of your premium. If you decide to cover the costs of repairs yourself without going through insurance, expect a hefty bill. Wear and tear also gets pricey – routine repairs like replacing worn-out brakes or tyres can cost a few hundred pounds and vary by brand (and quality). 

Repairs and routine maintenance vary in price according to where you get them done. Going to a dealership (eg VW for your Golf) will usually cost significantly more than your local independent garage.

If you can’t be without your car, it’s a good idea to have some money set aside for a rainy car day, where it needs some maintenance or repairs. You could set up a car costs savings goal to help.

The information contained in this article is for general information purposes only and is not intended to constitute financial advice. Please seek independent professional advice relevant to your circumstances. Barclays does not accept any liability for any losses as a result of relying on the information contained in this article. All opinions and estimates are given as of the date of publishing.