Research from By Miles, a ‘pay-by-mile’ motor insurance provider, shows that your postcode can have a big impact on how much you pay for every mile you drive. In a world where we’re encouraged to ditch the car, part of the reason some drivers aren’t getting as much value from their vehicles may surprise you—they aren’t driving enough!
Of all the motorists in Britain, annual car ownership costs the most for Londoners. Figures show that car owners in Greater London pay around 32% more per mile for the pleasure of driving compared to people in Galashiels, Scotland. Where in this range does your postcode feature?
Postcode lottery
So, what’s the reason for such a cost disparity? The price of petrol, diesel, and car insurance seems to be the answer, as their cost is rising fast in London. Drivers in London pay 0.8 pence more per litre of petrol than those in Scotland. When paying for car insurance—per mile—the motorists paying the least spend £351 per annum while the most expensive motor insurance was in East London (E) postcode; with an annual cost of £979—a whopping £628 difference.
When calculating the overall cost of car ownership by postcode, By Miles factored in the cars’ depreciation value over a five-year period. They took into account the average cost of motor insurance—using the data from the comparison site MoneySuperMarket’s 2.7million car insurance quotes. Their findings didn’t even include the cost of parking and the congestion charge in London, nor time wasted in traffic jams.
Most expensive places to run a car per mile
| Location | Average cost of annual insurance | Annual fuel costs | Average annual mileage | Cost per mile |
|---|---|---|---|---|
| Greater London | £732 | £902 | 6,350 | 58p |
| Manchester | £791 | £941 | 6,666 | 57p |
| Dudley | £566 | £884 | 6,243 | 56p |
| Stockport | £518 | £866 | 6,132 | 56p |
| Oldham | £772 | £972 | 6,884 | 56p |
By Miles examined petrol and diesel prices across Britain, including necessary vehicle expenses like vehicle tax, MOT, and servicing. They then divided the total cost by the average of miles driven each year, per postcode; which gave them the average price per mile.
Statistics from the Department for Transport (DfT) states that, in 2017, British motorists drove, on average, 7,134 miles each year. Yet a massive 19million motorists are low mileage drivers, driving fewer than 7,134 miles per year. In 2016, motorists drove an average of 7,250 miles per annum, and 7,334 miles in 2015.
Cheapest places to drive a car per mile
| Location | Average cost of annual insurance | Annual fuel costs | Average annual mileage | Cost per mile |
|---|---|---|---|---|
| Galashiels | £351 | £1,069 | 8,202 | 44p |
| Inverness | £353 | £1,145 | 8,126 | 45p |
| Perth | £356 | £1,135 | 8,051 | 45p |
| Dumfries and Galloway | £336 | £1,100 | 7,804 | 45p |
| Falkirk | £383 | £1,100 | 7,943 | 46p |
By Miles found the locations with the cheapest cost-per-mile car ownership were in Scotland, with motorists in Galashiels, Inverness, and Perth driving over 8,000 miles per year. Although these areas cost more to fill up, they have lower insurance costs, balancing out the total expense.
Going the extra mile
Greater London, Manchester, and Dudley residents drive, on average, fewer than 7,000 miles every year.
James Blackham, Co-Founder and Chief Executive Officer at By Miles said:
‘Those who don’t drive as much are being treated unfairly.
‘They’re being charged more to subsidise the insurance of higher mileage drivers.
‘This needs to change. If you don’t use your car much, it doesn’t make sense to charge you the same as a longer distance driver as the odds of you having an accident are significantly lower.’
Blackham says if your mileage is under 7,000 miles a year, a pay-per-mile car insurance policy might be a more flexible way to insure your vehicle.
‘Pay-by-mile insurance means that people who drive less are rewarded and rightfully pay less, he added.’
The current set-up of motor insurance may tempt you to lie on your application about how little you drive, to reduce costs. But, doing this risks invalidating your policy if you need to make a claim.
Tom Flack, Content Lead at MoneySuperMarket, feels, ‘if you drive less, you should pay less.’
He says:
‘It’s always been important to shop around to make sure you’re getting the best deal. That now includes looking at new technologies that offer drivers increasingly flexible ways of insuring their cars—particularly for those who live in disproportionately expensive areas like London and Manchester.’
Take control of your driving costs
Note how many miles you drive each year. If you discover you’re a low mileage driver, report the correct mileage on motor insurance applications and consider pay-per-mile insurance.
Don’t be one of the 8million drivers who get overcharged just by auto-renewing each year. Use comparison websites to get the cheapest and best policy for your circumstances. Don’t forget cashback sites.
Remember, you’re not locked into your insurance policy. You can cancel mid-policy and while you may have to pay a cancellation fee, the savings from switching often far outweigh the penalty. You’ll receive a pro-rata refund of any full, unused months of the policy.
Don’t forget PetrolPrices can save you money, too! If you haven’t yet, jump on board and join the over 2.1 million drivers who already compare petrol and diesel prices. You could save yourself up to £220 a year. Become a PetrolPrices member for free and compare prices for unleaded, super unleaded, diesel, and premium diesel. Want somewhere to tell others about fuel prices? Need somewhere to flatter—or maybe fume about—a particular petrol station? You can do that too!
To join the PetrolPrices money-saving community, just pop in your email address and add your postcode to find the cheapest and nearest petrol stations. And for an easy way to use our service while out and about, download our FREE mobile app and earn points along the way!
Do these figures surprise you or are they what you’d expect? How much do you think it costs you per mile, to own and run your car? Let us know in the comments.
Sorry, don’t agree with the theory that the fewer miles you drive, the less likely you are to have an accident. Those driving fewer miles are likely to live in crowded urban environments and have less day-to-day driving ‘practice’. When added together, these factors are likely to lead to more accidents, not less.
I lived in Central London and drove there for 25 years and it was a nightmare with pedestrians and the bikes – let alone other road users. The lack of road sense overwhelms even careful and experienced drivers. As well as the normal scrapes and bangs with narrow car parking spaces and the insistance of people in having huge cars, my windscreen was broken by kids throwing 5p pieces off high rise flats, my car was hit twice by cyclists – including one not wearing shoes, and another one who moved to another lane without indicating, I welcome diversity but not people with pushchairs or on the Boris bikes looking the wrong way or simply going the wrong way down one way streets because they don’t understand the rules of the road. And don’t get me started on the mobile phone addicts who seems to forget there is a road at all. In fact in London I was always shocked that my car insurance wasn’t higher.
@Liz. Having driven a 6 axle 44 tonne articulated lorry in London, I completely agree with you.
Is this a serious article or an advertisement for “pay per mile” insurance
It is expected. A growing population (necessary for economic growth- which is necessary for fat cats to make more money) means more road users. More road users means traffic flow becomes less efficient so emissions increase at an exponential rate and this is only saved by vehicles with lower emissions (which are less reliable due to the overly slow speeds they are used in).
Factor in new drivers who typically learn in overly busy roads which have reduced flow rates and they adopt the same techniques as older (not all) and inept drivers who are unable to drive efficiently. Factor in the dreadfully progress most vehicles make due to weight of traffic and the techno laden vehicles which have somehow become desirable and no wonder so few drivers pay attention and make efficient progress.
Another part of the problem which also comes from weight of traffic are pedestrians how cannot cross a road without pressing a button first. Either that or these gormless people press the button first, then cross the road before the pedestrian crossing does a cycle for non existent pedestrians which causes 30 odd vehicles to stop. The worst offenders appear to be gormless young people who cannot exist with their mobile phone and groups of fat single mums. The exception is older people who still have good mobility because they were taught how to cross by using judgement and making decisions.
What is truly ironic os that in the days of all the fluffy common purpose training BS is that there are ever more ignorant people who are around who act only for their own benefit. This appears to be one of the causes of really poor traffic flow along with young drivers who drive like very old drivers who have had to compensate for their reduced ability due to their advanced years.
I see things will become much worse and we are heading ever more quickly towards population control which will be driven mainly by environmentalism.
Sorry, I went off on one there.
Cities of course mean lower mileage, lower economy and ever more ways a vehicle can be damaged.
Personal motor transport is not really as viable in highly dense cities.
No your welcome, what the, new way to rip you off while telling you its cheaper. Ok smart bum, were do you leave your 60k motor uninsured while you’re not using it? The insurance hope that it will be nicked while not covered so will save them millions in pay outs. Pat ya self on the back boys, nice big chrimbo bonus for us.
@Shed Don’t be silly, it would insured against fire & theft at all times, just as it is now.
I’ m disappointing because I clicked on Cities planning to ban cars
me too
Me too
Cost of running cars
The poor standard of driving generally is partly due to the manner in which people are taught and tested . I trained as an instructor and passed all of my tests but did not go on to teach. I strongly disagreed with how instructors are taught to teach. The test is not good enough and people are thrown out there onto the road with no experience. It will never improve until they change how learners are taught. Alongside this, there should. In my opinion, be tests every ten years. There would be a surprising number who would not be able to
Pass the current test who have been driving for a long time .
I tend to agree with you, Kim. I know 2 instructors who have given me insight into how to teach people. I think it doesn’t go far enough but retests would need many more instructors and tests as well as creating outcry when some people find out they can no longer use the roads. This would create more unemployment than drink driving bans and the government doesn’t want to be deprived of revenue even though much of England is already overpopulated.
The headline has absolutely nothing to do with the article. Hopefully this is just a mistake. But I fear it is just click bait. Shame on you.
I call BS on this:
“James Blackham, Co-Founder and Chief Executive Officer at By Miles said:
‘Those who don’t drive as much are being treated unfairly.
‘They’re being charged more to subsidise the insurance of higher mileage drivers.”
Firstly, I’d like to see the stats on this from insurance companies to see if that is true.
Also, bear in mind that those who pay lower costs per mile live in rural parts of Scotland where mileages to get between places are huge compared to densely populated areas in the south of England. Overall, their costs are way higher I suspect because of these distances travelled in relatively remote areas.