When you are in the market for a new set of wheels, it is incredibly easy to get caught up in the excitement of browsing dealerships and finding the perfect vehicle. For most of us, the first big question we ask ourselves is: “Can I afford the monthly payment?” At Refused Car Finance, we specialise in helping drivers get back on the road with budget-friendly loans, even if they’ve been turned down elsewhere. We always work hard to secure affordable monthly car payments for our customers.
However, being a responsible driver means looking at the bigger picture.
True affordability isn’t just about what leaves your bank account on the finance payment date. To make sure you aren’t caught off guard, you need to understand the full cost of owning a car and, just as importantly, the ongoing cost of running a car.
Let’s break down the hidden costs of car ownership so you can budget with total confidence.
1. Fuel and Charging: The Daily Expense
The most obvious part of the cost of running a car is keeping it moving. Whether you choose a traditional petrol or diesel model, a hybrid, or a fully electric vehicle (EV), fuel will be a regular hit to your wallet. When choosing a car, don’t just look at the sticker price; check the realistic MPG (miles per gallon) or the EV range. A car with a slightly higher monthly payment but fantastic fuel efficiency might actually save you money overall compared to a cheaper gas-guzzler.
2. Car Insurance: The Mandatory Cost
You can’t legally drive on UK roads without insurance, and the cost can vary wildly depending on the car you choose. Insurance companies group cars from 1 to 50 based on how expensive they are to repair, their performance, and safety features. If you are trying to keep your overall cost of owning a car down, it’s a smart move to look at smaller, reliable cars in lower insurance groups. Always get a quick insurance quote before you sign on the dotted line.
3. Road Tax (VED)
Vehicle Excise Duty (VED), commonly known as road tax, is another annual or monthly cost to factor in. The amount you pay depends on the car’s carbon dioxide emissions and its registration date. While some eco-friendly or older vehicles have very low tax rates, others can add a hefty chunk to your annual driving budget.
4. MOT and Regular Servicing
An MOT is a legal requirement every year once a car turns three years old. While the test itself has a maximum legal fee, any issues found will need to be repaired to get your certificate. Beyond the MOT, regular servicing (changing the oil, filters, and checking fluid levels) is vital to keep your car running safely and to prevent expensive breakdowns later on. Skimping on maintenance to save money in the short term usually backfires with a massive garage bill down the line!
5. Wear and Tear (Tyres, Brakes, and Wipers)
Cars are complex machines, and certain parts are designed to wear out over time. Tyres lose their tread, brake pads wear down, and windscreen wipers start to streak. Replacing a full set of tyres or getting new brake discs can suddenly add hundreds of pounds to the cost of running a car. Keeping a small “emergency car fund” tucked away each month can prevent these inevitable costs from causing a financial headache.
Finding the Right Balance
When we look at affordability, responsible lenders look at your income and outgoings to ensure you have enough breathing room. We want you to love your new car, not stress over it!
To figure out your true budget, we recommend doing a quick calculation:
Total Monthly Vehicle Budget = Monthly Car Payment + Estimated Fuel + Insurance + Tax/Maintenance Fund
By looking beyond just the monthly car payments, you ensure that your new vehicle fits perfectly into your lifestyle without stretching your finances to breaking point.
Need a Hand Getting On the Road?
If you’ve had difficulty securing finance in the past due to a poor credit score or a tricky financial situation, don’t worry- there is still hope! At Refused Car Finance, we do things differently. We use a soft credit check to compare a range of specialist lenders, meaning your credit score won’t be impacted just for checking your options.
Our team of friendly car finance experts will work with you from start to finish to find an option that matches your realistic budget.
Get a quick quote today and see how we can help you drive away in a reliable car that you can truly afford!