The Real Cost of a First Car in 2025

Owning your first car has always been a milestone of independence — but in 2025, it’s also one of the most expensive milestones a young driver will face. The average 17–20 year old now pays more for insurance than the car itself, and the hidden costs don’t stop there.

Insurance – the biggest shock

For new drivers, insurance can easily reach £2,000–£3,000 a year — in some cases more than the purchase price of the car. Age, postcode, and lack of experience all push premiums sky-high, which often comes as a nasty surprise to parents and young drivers alike.

Running costs add up quickly

• Fuel: With petrol averaging £1.45–1.55 per litre in 2025, even modest driving habits add up.

• Road tax: Around £180–£250 a year depending on emissions.

• MOT & servicing: An MOT costs ~£54, but most cars will need £250–500 in servicing each year.

• Repairs: Tyres, brakes, clutch replacements — a single repair can run to hundreds.

Depreciation – the silent cost

The moment you buy a car, its value begins to fall. A typical £9,000 small hatchback can lose 25–30% of its value in just two years. That means if you sell after a couple of years, you could be down by £2,000–£3,000 before even factoring in running costs.

Why subscriptions are becoming popular

Instead of juggling unpredictable bills, more young drivers are exploring car subscriptions. With a single fixed monthly payment, you cover:
✅ The car itself
✅ Insurance
✅ Warranty
✅ Servicing
✅ Breakdown cover

No lump-sum deposit. No nasty repair bills. No shock insurance premiums. Just a simple, transparent way to get on the road.

The bottom line

Owning a car outright might feel traditional, but by the time you’ve added up purchase price, insurance, depreciation, and maintenance, the “cheap run-around” often costs double what you expected.

For parents and young drivers, a subscription model offers not only financial predictability but also peace of mind — safe cars, no hidden costs, and the freedom to focus on driving, not bills.

If you’re weighing up the cost of a first car in 2025, consider whether ownership really makes sense — or whether a subscription like Step 1 Cars could be the smarter first step.