As a Londoner buying a car may not be a necessity. However, if you live further away or just want the convenience, you may be thinking of buying one. I was recently researching all the costs involved. In South Africa, you only needed to think about the car payments, insurance and servicing. But here in the UK there are additional costs to consider.
Vehicle Tax – Apparently this is also incorrectly called “road tax”. This is an annual tax that is levied as an excise duty and must be paid for most types of vehicles used (or parked) on the public roads in the United Kingdom. It is paid at your local post office or by debit order. This tax varies, starting from +/- £30+ and is based on the car engine size, or fuel type and carbon dioxide (CO2) emissions. It is possible to get vehicle tax exempt cars:
See this link for more details on the vehicle tax rates: https://www.gov.uk/vehicle-tax-rate-tables
MOT – An MOT test is an annual vehicle safety and roadworthiness test required for most vehicles over three years old. MOT test prices vary by company and are dependent on the type of vehicle you own. Test centres can only charge up to the official DVSA (formerly the DVLA) maximum fee of £54.85. If you’re buying a secondhand car you may want to check the MOT history using this link: https://www.gov.uk/browse/driving/mot-insurance
Insurance – Car insurance is probably the biggest cost added to buying a car especially if you’re making monthly car repayments too. The first year of car insurance is most likely to be the most expensive. I was getting quotes starting from £1200. When shopping around for car insurance quotes, I found some tips that can decrease the quote:
- Try comparison sites such as:
moneysupermarket, gocompare, confused.com, comparethemarket.com
- Go directly to insurance sites such as Directline, Aviva
- Take a higher voluntary excess. Choose the different price levels to see the difference it makes to the quotes.
- Try adding an additional driver
- Secure your car by fitting an approved alarm, immobiliser or tracking device
- Drive less miles. If you’re a “social” driver then specify less miles on the quote for example about a 1000 miles a year
- Check if the type of car you’re thinking of buying will attract a higher insurance premium for example sporty cars
- Specify that the car is being parked on the street near the property rather than on the driveway. Apparently this can sometimes reduce the quote.
- If you can afford it, choose to pay the insurance once off rather than monthly as this can increase the premium
- Be precise about your job title. Some jobs titles can affect your premium. Use this tool to see if there are other similar job titles that may reduce the premium: http://www.moneysavingexpert.com/insurance/car-insurance-job-picker/
- Choose fully comprehensive cover over third party cover
- This won’t be applicable to a first time car insurance buyer but building up your “no claims discount bonuses” every year will also reduce the premium
After applying some of these tips I was able to reduce the insurance quote to about £550. That’s more than half the original quote!
Car servicing – Apparently the average cost of a car service is £125. A quick search online returns some companies charging from £79. For the car we were looking at, a minor car service is about £150 and a major service can cost about £350.
So after all that research, we decided to postpone buying a car. At least I now have a better idea of the costs involved and hopefully this information will be useful to you too 😉