Car ownership costs up £5,000 in a decade
Car ownership costs have gone up by £5,000 in a decade, according to new research from GAP insurance provider ALA Insurance.
Based on data from the Association of British Insurers, the RAC, the Bank of England and the Office of National Statistics, it estimated that the annual cost of running a car in 2026 is £11,500 compared to £6,500 in 2016.
This is an increase of about £415 a month, with costs being driven up by higher fuel prices, increased insurance premiums, and finance and purchase prices.
Simon England, founder of ALA Insurance, said: “The shift to monthly payments has effectively buried the real cost of owning a car. Most people buying a new car are handed a monthly payment and told that is the cost, but it isn’t that simple.
“Once you account for depreciation, fuel, insurance and tax, the average new car driver is spending well over £900 a month to keep it on the road. General inflation has run at around 35% to 40% over the past decade, but car insurance has risen 70%, new car prices by nearly 90%, and finance costs have doubled.
“Millions of drivers are now committed to a level of spending that would have been unthinkable in 2016, often without fully understanding how it got this expensive.”
