Misc
The unseen Mileage Costs Build up
The real cost of driving a car is a lot more than just fuel. (Taken from a AA Report)
OK, insurance, road tax and garaging costs are pretty much the same whether you make that journey or not. But the depreciation will increase, wear and tear will occur and the car will be taken that bit closer to its next service and ultimate demise. And then there's the fuel.
Currently HMRC allowances for an employee using their own vehicles are 45p / Mile
The following fixed costs you will incur regardless of whether your car is used or not for any given journey:
Insurance
Age based depreciation
VED
Garaging
Then the running costs which are:
Fuel - approximately 12p per mile for your car.
Servicing - approximately 3p per mile for your car (source AA)
Wear & Tear - approximately 2p per mile for your car (source AA)
Tyres - approximately 1p per mile
Mileage based depreciation - approximately 5p per mile for your car (assuming you do a normal amount of miles per year).
The recommend rate was 97p per mile when set but fuel has risen by 10p/Litre in the period so our current rate of £1.00 per mile is a justifiable rate
Standing charges
The letters correspond to those in the left-hand column of the petrol and diesel running costs tables.
A. Car tax (VED)
The value shown assumes that the car was first registered after March 2001 and is the average for the cars considered in each price group.
More about car tax and CO2 emissions.
B. Insurance
The value used is a UK average for a fully comprehensive Business policy with 60% no-claims discount.
C. Cost of capital
The figures in the table represent the income you lose from having money tied up in the vehicle, which otherwise could be earning interest in a deposit account. This year we used the AA's online saving rate of 2.8% together with the average value for the cars chosen for each cost group.
Any further admin charges for a loan or hire purchase will be on top of this.
D. Depreciation
Cars lose value at different rates depending on their make, age, mileage and condition. We assume that depreciation costs are averaged over four years from purchase, and include typical adjustments for different annual mileages in that period. Cars generally depreciate at a slower rate as they get older.
We use different depreciation rates for mileages which differ from the average 10,000 miles/year.
E. Breakdown cover
The figure shown is based on the cost of basic roadside assistance
Running costs
F. Fuel
We use the UK average value from our fuel price report.
The fuel consumption figures we use are estimated typical values for each of the car price bands shown in the tables.
G. Tyres
We assume the car will use six tyres in a four year period and the values in each category are based on online tyre dealer prices for a well known brand. It is possible to find cheaper brands. The price includes valve, balance and disposal charge for old tyre. They are not main dealer prices - which will inevitably be higher.
H. Service and labour costs
The labour costs shown cover normal servicing and parts replacement at a dealer, taking average UK labour rates. Actual labour rates vary a lot depending on where in the country you are as well as from brand to brand.
I. Replacement parts
The replacement parts included cover those likely to be needed under normal driving conditions, such as brake materials, oils, filters, bulbs and wipers.
J. Parking and tolls
Car parking and toll payments are based on a national average for an urban driver. You might pay more or less depending on how much and where you use your car.
K. Garaging
All Company vehicles have to be garaged out of working hours
