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.

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