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Running Costs For Your Used Car

By: Scott McBride - Updated: 23 Nov 2010 | comments*Discuss
 
Running Costs For Your Used Car

Buying a used car is just the beginning. It is only when the car is sitting safely in the driveway that the real cost of motoring kicks in. Running costs add up to more than most drivers think and only go in one direction – up.

The savvy buyer will take a careful look at the running costs of a car before making a purchase. When doing this, it is important to take both the standing charges and running costs into account. It can come as a bit of a shock when the sums are totted up, but at least a buyer will be able to set aside a budget.

Standing charges are the basic costs incurred just keeping the car ready for use on the road. They include road tax, insurance, depreciation, car finance costs and breakdown cover. Depreciation tends to be the biggest single cost and can add up to thousands of pounds every year. Running costs are those incurred directly by using the car, such as fuel, parking, tolls, tyres and brake pads, servicing and repairs. This bill goes up with every mile travelled.

Prices Plummet

Depreciation is driven by three factors - age, mileage and condition. Car designs have a limited life and prices plummet as soon as a replacement model is announced. High mileage makes values drop faster and poor condition will hammer a car’s worth too. The newest cars are hardest hit, with some losing 40 per cent of the new price within 12 months and 10,000 miles. If a car depreciates heavily, it may be worth only 30 per cent of its original value after three years, and even a car with low depreciation can expect to lose at least 25 per cent of its initial worth in that time.

Fuel consumption does not have the huge bearing on running costs that many people seem to think. A car that offers 47 miles to the gallon (mpg) is preferable to one that does 39 mpg, but at petrol prices in June 2008 the more economical motor would save only £235 in 10,000 miles. This saving can be wiped if the more economical car has higher depreciation, insurance or servicing costs, so look at the bigger picture. If planning to cover a lot of miles, it is important to think about fuel type, as diesel – although more expensive than petrol – is more economical and diesel cars are cheaper to tax and service.

Save on Finance

Buying a used car with savings as opposed to a finance deal will cut costs, as will choosing a car that has a low insurance group rating. Try to pick a car with service intervals of 10,000 miles or more and if really keen to reduce running costs consider trading down to a smaller, cheaper and more economical car.

Car insurance premiums can have a big impact on running costs, particularly for younger drivers, so get a quote before buying a used car. Check out the cost of routine maintenance too, as regular servicing not only improves reliability but also extends the car’s life and preserves the car’s value.

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