Fuel Cost Calculator
Fuel is the cost most people think about first when budgeting for a car, but it is rarely the largest part of what a car actually costs to run — insurance, servicing, road tax and finance or depreciation together often add up to more than the fuel bill itself. This calculator adds all of these together to give a genuine total running cost and a true cost per mile, rather than just the fuel component on its own.
Fuel Cost & Car Running Cost Calculator
Calculate your annual fuel spend and total car running costs. Compare petrol vs diesel vs EV.
Fuel Is Rarely the Biggest Cost
For a typical mid-range car doing an average annual mileage, fuel commonly makes up somewhere between a third and a half of the total annual running cost, with insurance, servicing, road tax and any finance payment making up the rest. This is worth knowing before assuming that a more fuel-efficient car is automatically the cheaper one to run overall — a car with excellent MPG but a high insurance group or expensive servicing can still cost more in total than a slightly thirstier car that is cheaper across the other categories.
This is particularly relevant when comparing two different cars before a purchase decision — focusing only on the advertised MPG figure and ignoring the insurance group, typical servicing cost and expected depreciation can lead to a genuinely more expensive choice, even though the fuel line alone looked like the cheaper option.
The 45p Rate Most People Misunderstand
HMRC allows employees using their own car for business travel to claim 45 pence per mile tax-free for the first 10,000 business miles in a tax year, dropping to 25 pence per mile after that. This rate is not meant to represent fuel cost alone — it is a blended figure intended to cover fuel, wear and tear, insurance and depreciation attributable to business use, all combined into a single per-mile rate. Comparing your own calculated cost per mile against the 45p rate gives a genuinely useful sense check: if your real running cost per mile sits meaningfully below 45p, the mileage allowance likely more than covers your actual costs; if it sits above, you may be running a car that costs more than the allowance was designed to reimburse.
This comparison is worth revisiting periodically rather than assuming it stays constant — fuel prices, insurance premiums and servicing costs all change over time, so a car that comfortably sat under the 45p rate a couple of years ago may no longer do so today, particularly if fuel prices have risen meaningfully since the comparison was last checked.
Why MPG on the Sticker Rarely Matches Real Life
Official fuel economy figures, whether from older NEDC testing or the newer WLTP standard, are measured under controlled laboratory conditions that rarely match real-world driving — stop-start urban traffic, cold starts, air conditioning use, and simply driving less economically than the test cycle all pull real-world MPG below the official figure, sometimes by a meaningful margin. Entering your genuinely observed MPG, calculated from your own fuel receipts and mileage over a few tanks, gives a far more accurate result here than relying on the manufacturer’s official figure.
A Full Year, Broken Down
A car doing 10,000 miles a year at 40 MPG with fuel at 148p a litre costs roughly £1,680 in fuel alone — working out to around 16.8p per mile just for fuel. Add typical annual costs of £400 for servicing, £800 for insurance and £180 for road tax, and the total running cost rises to around £3,060 for the year, pushing the true cost per mile to roughly 30.6p once every cost is included, not just fuel. That figure sits comfortably under the 45p HMRC mileage rate, but a car with higher insurance, lower MPG, or a finance payment added on top could push considerably closer to, or past, that threshold.
What Actually Changes Your Cost Per Mile
Cost per mile is driven by two quite different things: the fuel cost itself, which scales directly with mileage, and the fixed costs — insurance, road tax, servicing — which stay roughly the same regardless of how much you actually drive. This means cost per mile falls as annual mileage rises, since the same fixed costs get spread across more miles, and rises for a low-mileage driver, since those same fixed costs are spread across fewer miles. This is worth understanding specifically if comparing cost per mile against the HMRC mileage rate, since a low-mileage driver’s genuine cost per mile can look considerably higher than a high-mileage driver’s, even in an identical car. If insurance specifically is the input you are least sure about, our Car Insurance Cost Calculator can help estimate it more accurately, and our Monthly Budget Planner is useful for fitting the total running cost into your wider monthly budget.
Frequently Asked Questions
Should I include finance payments as a running cost?
If you are financing the car, yes — including the monthly payment gives a more complete picture of what owning and running the car genuinely costs, rather than understating it by only counting fuel and servicing.
How do I work out my real MPG rather than the official figure?
Fill the tank completely, reset the trip counter, drive normally until the tank needs filling again, then divide the miles driven by the litres needed to refill, converting to MPG. Averaging this over two or three tanks gives a more reliable figure than a single reading.
Does an electric car use this same calculation?
Not directly — this calculator is built around petrol and diesel fuel costs specifically. An electric car’s running cost is driven by electricity price and efficiency (miles per kWh) rather than MPG and pence per litre, which is a different calculation.
Why does my actual fuel spend not match this estimate?
Differences in driving style, more urban versus motorway driving, carrying extra weight, or roof racks and other aerodynamic drag can all affect real-world MPG meaningfully, causing a gap between an estimate and actual spend even with accurate inputs.
Is depreciation the same as finance cost?
No — finance cost is what you pay monthly if the car is financed, while depreciation is the loss in the car’s value over time regardless of how it was paid for. A car bought outright still depreciates, even though there is no monthly finance payment to include.
Does this calculator account for congestion charges or toll roads?
No — it focuses on the core, ongoing costs of fuel, insurance, servicing, tax and finance. Regular congestion charges, toll roads or parking costs specific to your commute would need to be added separately for a fully complete picture.
Important Information
This calculator provides an estimate for general information purposes only and does not constitute financial or tax advice. Fuel prices fluctuate regularly and actual running costs vary by vehicle and driving conditions. For HMRC mileage claims, confirm current rates directly with HMRC. See our Disclaimer for further information.