Owning a car comes with plenty of benefits, but it also comes with regular expenses that can add up quickly. To manage these costs effectively and avoid surprises, tracking your car spending is essential.

Whether you're a seasoned driver or a new car owner, this guide will help you keep your finances in check while staying on the road.

Why You Should Track Your Car Spending

Buying a car is only the beginning. Even after saving for the purchase or entering into a finance agreement, the ongoing costs of maintaining and running a car can be significant.

If you’ve noticed your car expenses creeping up, tracking your spending can help you identify areas where you can save. Simple changes like shopping for cheaper insurance, finding deals on fuel, or budgeting for maintenance can make a big difference. Over time, you’ll also be able to predict yearly costs and plan accordingly.

How to Budget for Your Car

Calendars or Diaries: Mark payment dates, upcoming renewals, and maintenance schedules.

Spreadsheets: Create a tailored sheet to log each cost, payment frequency, and due dates.

Apps and Planners: Tools like Goodbudget use systems to help you manage and categorize car-related expenses.

Costs to Track

1. Fuel or Electricity Costs

Fuel or charging is likely your most frequent expense. To monitor efficiency:

Calculate your miles per gallon (mpg) or electricity consumption.

Compare prices at different stations or during off-peak times (for EV charging).

Reduce trips by combining errands or walking for short distances.

Estimated Cost: Varies by fuel type and driving habits.

Frequency: Regular, depending on usage.

2. Servicing, Maintenance, and MOTs

MOT Test: Legally required annually in the UK, costing up to £54.85.

Servicing: Recommended every 12 months or 24,000 miles, starting at £150.

Repairs: Include costs for tyres, brakes, or other necessary fixes.

Consider setting up a monthly savings for these expenses to avoid financial stress.

Estimated Cost: £200+ per year (MOT + service).

Frequency: Yearly for MOTs and servicing.

3. Insurance

Car insurance rates vary depending on your vehicle's model, engine size, and risk factors. Smaller, low-cost cars are typically cheaper to insure. Shop around for quotes to find the best deal.

Estimated Cost: Varies significantly based on the car and coverage.

Frequency: Annually or monthly, depending on your payment plan.

4. Car Tax

While electric cars are currently exempt from road tax fees (until April 2025), most other vehicles require regular payments. You can choose to pay yearly, every six months, or monthly.

Estimated Cost: Based on the car’s emissions.

Frequency: Yearly, six-monthly, or monthly.

By tracking your car spending and budgeting wisely, you can enjoy the convenience of car ownership without financial strain. Take control of your expenses and plan ahead to stay on top of your car costs!

HOW TO Budget For A Car (And How to Buy A Car The Right Way)

Video by Car Help Corner