Driving costs have soared by £5,000 a year over the last decade, with the average driver now spending more than £11,500 annually to own and run a car.
New research from ALA Insurance found that the total cost of car ownership has jumped sharply since 2016, driven by rising car prices, insurance premiums, fuel costs and finance repayments.
The average new car now costs around £34,000, up from £18,000 a decade ago, marking an increase of 89 per cent. By comparison, wages have risen by just 35 per cent over the same period.
Comprehensive insurance has also surged from around £400 a year in 2016 to nearly £700 today, while annual fuel costs have climbed from £1,180 to £1,705.
The report warned even second-hand cars are becoming increasingly expensive. The average used car price has risen from £12,000 to almost £18,000 in a decade.
ALA Insurance said the average driver is now paying around £415 more every month than they were in 2016, once all motoring costs are added together.
The £11,500 figure includes depreciation, fuel, insurance, servicing, road tax and finance repayments for drivers buying vehicles on credit.
Simon England, founder of ALA Insurance, said many motorists do not realise how expensive car ownership has become because monthly finance payments hide the true cost.
The rising cost of insurance, tax and fuel prices has caused annual driving bills to increase
| GETTYHe said: "Most people buying a new car are handed a monthly payment and told that is the cost, but it isn't that simple.
"Once you account for depreciation, fuel, insurance and tax, the average new car driver is spending well over £900 a month to keep it on the road."
Mr England warned costs linked to motoring have risen much faster than general inflation. General inflation has run at around 35 to 40 per cent over the past decade, he said. "Car insurance has risen by 70 per cent, new car prices by nearly 90 per cent, and finance costs have doubled."
"Millions of drivers are now committed to a level of spending that would have been unthinkable in 2016, often without fully understanding how it got this expensive," Mr England shared.
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Car insurance has risen by 70 per cent
| GETTYThe research found insurance premiums nearly doubled over the decade, peaking at a record £995 in 2023 before easing slightly.
Fuel prices have also increased sharply. Petrol has risen from around 104p per litre in 2016 to as much as 155p today, while diesel prices have climbed from 108p to more than 170p per litre.
According to the report, this has added around £500 a year to the average driver's fuel bill. Drivers switching to electric vehicles are also facing higher costs. EV owners now have to pay around £200 a year in road tax after previously being exempt.
Meanwhile, finance costs have become more expensive as interest rates rise. PCP finance rates, which were once between two and four per cent, now range from six to nine per cent.
Rising petrol and diesel prices have added £500 a year to the average driver's fuel bill.
| GETTYThe report said around nine out of 10 new cars are now bought using finance agreements. Depreciation is also hitting motorists hard, with the average new car losing around £14,000 in value over three years.
ALA Insurance said the findings were based on data from organisations including the RAC, ABI, Bank of England and Office for National Statistics.
The company explained the figures show owning a car has shifted from being a normal household expense to one of the biggest financial pressures facing working families.
Mr England added: "What was once a manageable cost for many households is now starting to feel more like a second mortgage."
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