How Much Does It Cost to Drive – 4 Key Factors

Man driving his car

As of November 2022, around 80% of British drivers were looking to save money on driving. That adds up to over 30 million British drivers trying to find ways to take to the road in a more efficient and economical fashion.

There are lots of factors that impact how much it costs to drive. Everything from a car’s insurance through to its maintenance adds up. That said, this article will specifically look at the impact that fuel has on how much it costs to drive, helping you to make savvier choices when you next hit the pump.

How does fuel impact how much it costs to drive?

There are four main factors that will impact the fuel cost per mile of your vehicle.

Fuel price

The cost of fuel is probably the biggest driving expense. Fuel prices fluctuate regularly. The price of fuel will vary because of combination of factors:

  1. The price of crude oil. The wholesale price of crude oil is the biggest factor in determining overall fuel price.
  2. Fuel duty and VAT. These are taxes that drivers have to pay on top of the cost of crude oil.
  3. Fuel prices are also dictated by the costs involved in their delivery.
  4. Retailer profit. Companies want to make a profit from any fuel they sell. As such, they’ll add a markup on the wholesale price of oil – typically anywhere from 5 and 10%.
  5. This refers to the ethanol content in the fuel, which can impact overall fuel price.
  6. The strength of the pound (sterling).

Another factor that determines fuel prices is regional variation. In rural locations with fewer fuel stations, prices may be higher, as businesses need to cover their overheads and have a monopoly market. Alternatively, in urban areas with a high number of fuel stations, prices may be lower in order to be more competitive.

Whilst you can’t control the price or ethanol content of crude oil, you can carefully plan your next trip to the pump, avoiding those retailers who heavily mark-up fuel.

Fuel type

The type of fuel your car runs on will determine its overall running cost. Diesel vehicles are more economic for long distances, but are more expensive overall. For shorter, stop-start journeys, petrol or electric vehicles will be more economical.

Vehicular efficiency

MPG refers to a car’s ‘miles per gallon’, and it indicates your car’s fuel efficiency. The higher the MPG, the less fuel consumed by your car when you drive. Higher MPG cars are therefore more fuel efficient and economical.

Driving style

Individual driving style and choices can help to reduce the cost of driving.

Avoiding intense acceleration, driving smoothly, using gears sensibly, and planning your route ahead so as to avoid traffic are more efficient and therefore economic driving styles. Don’t forget to avoid using the air conditioner unnecessarily and reduce vehicular weight, too.

How much does it cost to drive?

There’s no one straight answer for how much it costs to drive. This depends on a number of factors, ranging from the type of car you have through to the cost of fuel. 

If you want a figure on how much you’re likely paying to drive, there are plenty of fuel cost calculators online. These handy tools allow you to input information like your car make and model or registration plate and your annual mileage. From there, they’ll provide an approximate figure of how much it costs you to drive.

Alternatively, you can use the following formula yourself in order to establish your fuel cost per mile:

Cost per mile (pence) = Litres x Fuel price / Number of miles

To work out the annual running cost of your vehicle, you can use this formula:

Annual running cost = Cost per mile x Average mileage

How can I find cheaper fuel?

Take into account the factors listed above to try and shop around for the most economic fuel type for you.

Remember that fuel is typically cheaper at supermarkets, and premiums will be whacked onto motorway fuel stations. Avoid ‘premium’ fuel types, which typically offer little advantage to cars unless they’re performance models.

If you’re looking for a way to monitor the average price of fuel at different retailers, be sure to check out the RAC’s Fuel Watch initiative.

Find a more economical drive with My Car Credit

If you’re looking for a more economical and efficient car, check your car finance eligibility or contact My Car Credit on enquiries@mycarcredit.co.uk today.

Rates from 9.9% APR. Representative APR 12.4%

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Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

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*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.
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Electric Car FAQs – How Much to Charge?

Person charging up their EV
Most owners of EVs prefer to charge their cars at home, but it can also be done via workplace or public charging spots. The amount that it costs to charge an electric car inevitably varies between these locales. As such, the numbers provided below are a guideline rather than a hard-and-fast rule, but this article provides a good overview for how much it costs to charge an electric car..

How to charge an electric car

There are three main ways that an EV can be charged. Each one will impact how much it costs to charge an electric car.

Home

This is the easiest way to charge an electric car. It can be done via a three-pin domestic socket, but it’s more energy efficient to charge an EV with a dedicated home charger, as these are three times faster than a three-pin socket. As EVs become more popular, there are increasingly flexible at-home charging options available.

At-home charging is contingent on being able to install a unit for EVs, which can be pricey. You may be able to secure on OZEV grant in order to fund this, however.

Workplace

Check whether your employer has workplace EV charging, which is being introduced as a scheme to encourage commuters to switch to electric cars.

Public

The public EV charging network is vast, and it may feel overwhelming. Units can be found at locations including car parks, retail parks and service stations.

How much does it cost to charge an electric car?

Be aware that it’s difficult to provide an exact costing for how much it costs to charge an EV, because this will depend on energy providers, amongst a whole host of other factors, including the location, tariff, charging speed and the vehicle’s battery capacity.

Home

Exactly how much it costs to charge an EV at home will depend entirely on your energy tariff. It also depends on the car that you’re charging up. Smaller vehicles will cost less than larger SUVs.

However, as a general rule, it’s cheaper to charge your electric car at home than either at a workplace or public charging spot. Charging your EV to full capacity generally ranges from under £5 to around £15, depending on factors such as battery size and tariff.

If you’re looking to purchase an EV and are thinking about changing your energy provider, it might be an idea to look for tariffs with more affordable off-peak hours. You can take advantage of these off-peak hours to charge your vehicle, making use of the lower electricity prices.

Workplace

If your company provides workplace charging, you may benefit from discounted or even free charging, depending on their offering.

Public

There’s most variation in terms of how much you can expect to pay for charging an electric car via public infrastructure. Assume that charging your car to 80% capacity will cost anywhere from £7 to £10.

Rapid chargers tend to be the most expensive, but also the most time efficient, as they’ll charge your EV quicker than alternatives. Pod Point report that 30 minutes of charging at one of their rapid charging points at Lidl will cost around £6-7 and give approximately 100 miles of range. It’s slightly more expensive on their rapid chargers at Tesco.

There are also public charging networks like BP Pulse, which has over 9,000 public charging spots UK-wide and works via an app or membership card, offering either pay-as-you-go or subscription-based payment. Ecotricity is a greener option that operates via an app-based membership service, but there are others like GeniePoint and Shell Recharge, too.

Can you charge an electric car for free?

If you’re savvy about it, then there are ways to charge your electric car for free. Some retail parks and car parks offer the chance to do so – but be aware that you may need to pay for parking or conform to other regulations.

Tesco has partnered with Volkswagen and Pod Point, providing free charging on its fast charge points – but be aware that rapid charge points still require payment.

You can also use the Pod Point app and Zap Map to check for UK chargers near you. Use the filter tool to look out for free charging points, or opt for paid ones according to your need.

Cost-effective finance for electric vehicles

If you have doubts about how affordable owning and using an electric car might be, My Car Credit’s team of specialists can advise. We’ll give you an EV car loan quote and help you to find ways of driving more sustainably that won’t break the bank.

Get in touch today on enquiries@mycarcredit.co.uk and our helpful team will get back to you.

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*for illustration purposes only

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Representative Example

Borrowing £7,500 at a representative APR of 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.
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4 Factors That Impact the Cost of Car Finance

New car bought using car finance

Car finance is a great way to spread the cost of a new car. What’s more, it allows you to get a better vehicle and potentially save money on repairs and replacements in the long run. However, the cost of car finance itself can vary quite a bit. This depends on a number of factors, which we’ll discuss in this post.

1.   Cost of the car

The most obvious factor that affects the cost of car finance is the value of the car you’re looking to buy. Car finance is essentially a loan that you take out to pay the dealership or seller. The higher the value of the car, the more money you’ll need to borrow. This will make the monthly repayments higher as well as adding to the interest you’ll need to pay. So, to minimise the cost, more affordable cars are better.

2.   Credit score

Next on the list is your credit score. There are of course plenty of lenders which will provide car loans for poor credit. However, the score itself may affect the rate of interest which lenders will offer you.

Customers with good credit scores are seen as a safe bet, meaning lenders will be able to give them the lower interest rates. On the other hand, those with bad or poor credit scores are a bit more of a risk for lenders. As a result, they may need to pay a higher interest rate to balance out the risk to the lender.

3.   Length of repayment

Much like a standard loan, car finance can be taken out over a variety of repayment terms. Given that cars are quite a large purchase, 24 months is typically the minimum term for car finance. Alternatively, you might want to spread the cost over a longer period such as 36 months (3 years), 48 months (4 years) or even 60 months (5 years).

Paying back your car finance over a shorter term like 24 months will make the monthly cost of car finance higher. This is the result of the cost being spread over fewer instalments. However, it will generally reduce the overall cost of car finance because you will be paying the money back sooner, incurring fewer interest charges.

4.   Car finance provider

This brings us to another consideration – the provider you choose. Interest rates are one of the biggest factors when it comes to the cost of your car finance. Put simply, this is the cost added on to your loan over time as a charge for lending you the money.

Interest rates vary depending on which provider you choose, which is why it’s important to do your research before applying for car finance.

Car finance for poor credit

If you want to find a good deal on poor credit car finance, don’t hesitate to get in touch with My Car Credit. We use a large panel of trusted UK lenders to find a fair deal for all applicants. This allows you to minimise the overall cost for your new car and spread it across a repayment term that suits you.

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£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.
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Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

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or call 01246 458 810