Inflation on the road – How has cost ownership changed in the last decade?

While the recession has ended and inflation has plateaued in the UK, cost pressures remain high. For example, 60% of British shoppers claim they are concerned about rising supermarket prices, whereas others face a 10% rise in keeping their homes warm this winter. As a result, many British households still feel the squeeze following the recession. 

It’s no secret that owning and running a car is one of the biggest outgoings, but one deemed as necessary by 69% of the UK. More than 11 million Brits have less than £1,000 in savings, making buying a car outright impossible for many drivers.

That’s why our motoring experts at LeaseCar UK have looked at how the cost of car ownership in the UK has changed in the past 10 years. Through analysing data across wallet-draining factors such as insurance, fuel and tax, we’ve revealed just how much more pressure car ownership is putting on the UK’s finances compared to ten years ago.  

The study uses data to find the cost of ownership of the most popular cars in 2014 and 2024, analysing the following factors that contribute to car ownership:

• Purchase price 

• Maintenance cost 

• Vehicle tax 

• Fuel cost 

• Car insurance 

Buying a car now costs Brits £30,000 on average in the first year of ownership

Our analysis reveals that if Brits wish to purchase one of the most popular cars outright in the UK in 2024, they would spend £29,526.42 on average in their first year of ownership. 

Besides the initial purchase of the car, the biggest expense for car owners is fueling the car with a predicted spend of almost £900 (£855.92), which has increased 12% in ten years. The second costliest expense per year is insurance, with an average cost of £622 – a 53% increase on what the average insurance premium would cost for a popular vehicle in 2014. Tax has seen the biggest increase in the last ten years, with the average cost of taxing the ten most popular vehicles in 2024 vs. 2014 rising by 578.5%. 

The average cost of owning a vehicle in 2024

*Average purchase price is based on 10 most popular vehicles in the UK. Maintenance is based on the cost of one full service. Fuel cost is based on driving the average UK annual mileage. 

Owning a vehicle in 2024 is over £7,000 more expensive per year than it was ten years ago

Ten years ago, the average cost of ownership would be £16,048.42 in the first year, if purchasing a vehicle with a lump sum – that’s £7,478.42 less than it would be this year and 59% of the average annual wage at the time.

Our team at LeaseCar UK delved into the most commonly mentioned vehicles in ‘popular vehicles’ articles in 2014, then crunched the prices for five important factors of car ownership. 2014’s most popular vehicles are still cult favourites in 2024, including Ford’s Fiesta and Focus models, the Nissan Juke, the infamous Vauxhall Corsa and Audi A3.

Fuel in 2014 still remained to be the biggest expense of car ownership outside outright purchase but cost just £405.47 on average for the year – almost £250 cheaper than drivers would pay to insure the most popular vehicles in 2024. 

The cost of owning one of ten popular vehicles in 2014

*Average purchase price is based on 10 popular vehicles in the UK in 2014. Maintenance is based on the cost of one full service. Fuel cost is based on driving the average UK annual mileage. Vehicle tax differs as per tax band. 

Of the vehicles analysed, we found the Fiat 500 to be the cheapest. While its purchase price isn’t as cost-effective as the Vauxhall Corsa, its tax exemption in 2014 makes it one of the most affordable in our analysis. Comparatively, those purchasing the Nissan Qashqai outright in 2014 would have had to fork out £19,000 in the first year of ownership. 

The cost of owning a Volkswagen Golf has increased 65% in ten years

Some vehicles analysed stand the test of time in regards to popularity with the British public. The Audi A3, Volkswagen Golf and Nissan Juke all appeared in articles depicting them the most popular not only in 2014 but also ten years later in 2024. While the models remain the same, the cost of ownership is highlighted as considerably more expensive.

For the Nissan Juke,  the cost of ownership was £15,035 in 2014 and has risen 68% to £25,341 in 2024. Volkswagen Golf drivers, if purchasing outright, now have to pay 65% more than they did a decade ago. However – not all vehicles have risen in price as drastically – the cost of owning an Audi A3, while it was the most expensive car to own in 2014 out of those analysed, has risen just 1.4%  to £31,335 in 2024.

The cost of owning one of ten popular vehicles in 2024

*Average purchase price is based on 10 popular vehicles in the UK in 2024. Maintenance is based on the cost of one full service. Fuel cost is based on driving the average UK annual mileage. Vehicle tax differs as per tax band. 

Why has car ownership increased in price in the last ten years?

The rise in car ownership over the past decade is influenced by numerous factors. For example,  inflation has driven up the price of new vehicles, especially with increasing demand for more advanced technologies which come with higher manufacturing costs. The House of Commons has shared that the cost of insurance has risen 82% since 2021 and can be attributed to more complex repairs needed for modern cars. 

Car leasing: A cost-effective alternative to outright purchase

In light of the rising costs of car ownership drivers have faced over the last ten years, car leasing is an increasingly attractive option for many UK motorists. Leasing allows drivers to avoid the substantial upfront cost of purchasing a vehicle outright. With lower payments and the ability to drive new vehicles without worrying about re-sale, leasing can be a more budget-friendly option for drivers.

Tim Alcock at LeaseCar UK shares, “Leasing offers a more cost-effective solution than purchasing a vehicle outright in today’s climate. Leasing allows drivers to avoid the upfront costs associated with buying, while also offering flexibility to take out a new contract on a brand-new vehicle at the end of their lease term. Drivers get access to modern vehicles without worrying about depreciation or resale value.” 

Find out how leasing works 

Methodology